It is not insurance... insurance will cut you a check if you crash. But most insurance companies drop you after one claim. With DJI Care refresh you simply get a discounted rate to "buy" a refurbished drone should you crash or the drone start having issues. You only get to use the Care refresh fully for 1 purchase. So either insurance or Care refresh are worth it since the drone is around $700ish new.
I think the real question is...
"If DJI discovers that you modded the software on your drone and it crashed while using the mod; will DJI still warranty/honor the Care refresh or warranty?"
The simple answer is no.
The complex answer is all a matter of if you share that information with DJI willingly or if they find it themselves. Can DJI detect the mod? Yes if they look perhaps. Do they bother? I think in most cases no they do not have the time. They fill the warranty order and scrap the crashed one... life goes on. If you tell them NLD crashed your drone, they will surely deny your warranty claim.