Generally, you actually extend it by 1 year. You get a 3 year total warranty for $109, but the first year is the Canon Warranty, if you used a American Express card, they give you the 2nd year warranty at no charge, so you are really paying for that 3rd year.
Most issues will happen in the first 3 months, by the time the camera is 2 years old, there will be very few units failing.