Extended warranty - do they actually replace or do they buy you out?

Hi - I just ordered a Roamio Refurb from TiVo. Because of my many years of being a TiVo customer, they gave me a very good price on the HW, in return for accepting a smaller discount on lifetime service. I looked at the package price, liked it and bought. In fact, because it was a refurb, I kicked in the $40 to extend the warranty from 3 mo to 36 mo. Seemed like a good investment.


But - then I read the fine print. If it fails, technically, they -could- just refund me the low price I paid on the HW, leaving me to buy a replacement at a higher (although probably somewhat discounted) price. Does that happen?

Thanks!
/j