Yes, the extended warranty is more like insurance policy. I have used for first 2 years, but don't use it anymore.
Regarding the servicing by independent dealer, there is a discrepancy in what various dealers say.
Upon my inquiry whether the bike has to be serviced by dealer to keep the extended warranty, the answer is: NO, it only need to be a VAT registered garage. This answer was obtained directly from BMW insurance services, who provide the extended warranty. However, the job done under extended warranty needs to be done by BMW dealer.
Having said that, my dealer would still claim, in order to keep the extended warranty, I need to do servicing at BMW dealer (meaning him).
I also felt, that making claim under the extended warranty may be tricky. For example, when something is wrong, extended warranty does not cover the diagnosis to find out what is wrong. Only the replacement of faulty part.
See this thread to give you very rough idea of what sort of issues people have experienced and at what mileage.
http://www.ukgser.com/forums/showth...-serious-issue-with-yours-and-when&highlight=
The 800GS seems fairly reliable and you have a good chance to be without major issues for few years.