You shouldn't have problems, and as you say, $1,700 buys a lot of repairs. If you can do the work yourself then it buys even more. e.g. The detent spring will cost less than $40 if you do the work yourself - and it is a reasonably easy job, but about 4 hours work. The output bearing problem was primarily on early bikes, so should not be an issue for you. Besides, they may claim that it is a part of the drive train, along with the bevel box.
The other thing to check in the fine print is the service requirements. They may require that the regular and correct maintenance be done by the dealer - and done on time. If that is the case, then the cost of the policy suddenly just got a lot more expensive.