One thing to consider might be what sort of thing would that £350-£400 pay for if you did the service yourself, in respect of something which might otherwise be a warranty claim? I don't know prices, but if a starter motor is £300 then if it failed it would either be replaced under warranty (if you'd gone that route) or (if you didn't have the extended warranty) you'd replace it yourself and still be £50-£100 better off. I don't think I've explained that well, but hopefully you'll see what I mean.
Another consideration is that these bikes are tremendously reliable and the likelihood of a fault claimable under warranty developing within that extra year is extremely thin, I would think. Have a search of the forum and see what problems other owners have had for this model/year, preferably within the time period you're talking about the extended warranty period covering.