An insurance company, typically, is an entity covering the damage and not having control over the (price of) the damage. In my most convenient definition at least. For example, if you purchase a Dell Latitude you can buy warranty _and_ insurance. Warranty for anything that breaks by itself and insurance for you accidentally dropping your laptop. In the first case Dell has to cover only it's own manufacturing / labour costs to fix your laptop, in the second case the insurance company has to pay what Dell charges them (which presumably is still less than what Joe Doe would have to pay for dropping the computer). By Apple's choice, I've to pay >600Euro for a logic board, even if it costs themselves only 150 +50 for labour costs. This makes Apple Care a non-zero sum game.
Also, the annual costs for Apple Care - if bought at this ebay price - are 70 Euro. I just had my logic board and DVD drive replaced after 18 months (which makes me doubtful about their production quality but happy about Apple Care). It also covers my Cinema Display. I'm pretty confident that, over the effective 2-year interval, the expectation value of repair costs exceeds at least the 125 pounds asked on ebay. Wish I had known about this possibility, I paid full price in the Apple online store....