I would agree whole-heartedly with you – and as the years go by, it will become harder to argue that any failure is not due to wear and tear.
You have to appreciate that in any insurance scheme such as this – your £400 pa is paying for all sorts of overheads, not just repair claims.
My advice would be to save the £400 a year and act as your own insurer – if you were to have a claim every 3 years, £1,200 will buy a fair bit of MB garage repair time & parts.
Of course you could be very unlucky and have a very expensive repair (that would have been covered by the insurance) – but that is the [small] risk you take by following my advice.