I think the idea is that you buy the extended warranty one year at a time. So if you're a serial claimant in the first year, they will up your premium in the following year.
The VW extended warranty you buy upon expiry of the factory warranty is different to the extended warranty you used to be able to buy when new, which was simply an extension of the factory warranty. There are lots of exclusions, such as exclusions for some consequential damage.
Lots of aftermarket warranties are the same though.