I want to first thank you for your feedback. It is always good to have customers such as yourself researching before they buy. You are absolutely correct. The first year of mechanical malfunction is covered by the Panasonic manufacturer's warranty. The benefit of the plan that you are reviewing is that it provides coverage for accidents (such as drops or spills) for all 3 years. It also extends the Panasonic manufacturer's warranty by another 2 years.
This plan will have you covered for not only the first year of ownership of your Panasonic camera but the two years after. I hope this clarification helps.
Once again, thanks for taking the time to review our product.
Director of First Impressions