Don't spoil
Its not that macs spoil easily, its that if something happens on your 1 year old laptop, do you want to pay to get it fixed? As mentioned, the screen is $1000 USD to get fixed (approx) and I'd rather not shell out another grand on a laptop that cost me 3 grand to begin with.
I got it with my iBook 12" because I like knowing its there. Also, as said before, laptops are expensive to repair.
But also the insurance idea is a good idea as well, because that would cover things like accidental damage, whereas Applecare does *not*. But $250 does add to the price when you're trying to get a cheap iBook.