Extended manufacturer warranty isn't the same thing as a car insurance policy. Your car insurance company isn't also the manufacturer of your car. Replacing your car costs the insurance company a lot of money. It's not like Apple gives you a brand new watch anyway. They recycle all the insides they can from watches that have been returned on warranty and put a new case on them and assign them a new serial number. It really doesn't have much of an impact on their bottom line and they count on that anyway when selling Applecare+.
I suspect you were just being flippant with your original comment, but didn't want to waste the reaction.
In any case, there's no merit in anyone trying to justify or rationalise fraud or abuse of the AppleCare+ system, whether by guessing at the likely financial impact on the defrauded party (or parties) or any other method.
Fraud is fraud. And unless you have no moral compass, you know perfectly well where the line is drawn.
In Europe, the accidental damage element of AppleCare+ is provided by an insurance company. Intentional abuse of this constitutes insurance fraud, which is a criminal offence.