Statistically you are better off to self-insure, i.e. pay for your own repairs if any are required. This is especially true if you can handle routine repairs yourself. But if you need a call a repair service for every little thing or should you expereince a major failure (engine parts transmission, a refrigerator) then an extended service policy could be worth the money.
Shop around online, where you will get a much better deal than through an RV dealer. Most everybody is selling policies from the same few underwriters, so chances are you will get pretty much the same coverage no matter where you buy. Always ask who the policy is actually with, i.e. the issuing or underwriting company, and ALWAYs read the fine print.