Investigating a case is expensive, let alone litigating one against someone with their life's assets on the line, so it's in their best interest to prevent the event they're insuring against from occurring. They have the most accurate up to date data on real world outcomes so especially in professional circumstances, it usually pays to follow their advice.
Yup. They know having an electrician do all the work minimizes the risk of you needing to get payed out, so they want it so.
But the insurance doesn't care about your additional cost, since it's your cost, not theirs.
They don't go "cost of professional < additional risk * potential damages", they go "additional risk * potential damages > 0".
Then again, electrical work can be life threatening, so the potential damage is rather high.
As a DIYer, I was shocked to find what the previously hired professional electrician left for me: a secondary panel for the whole structure that controls exactly one outlet. The sub panel was apparently not fed from the main panel, but rather from a panel in a different building, so simply switching the main breaker of the breaker panel to off did not turn off that one specific outlet, you know the one I was trying to replace. Why that one outlet (GCFI in the bathroom) required it’s own sub panel was not clear at all but my left hand was numb for a few hours. Thankfully it didn’t go further than that (maybe a few copies of me in the multiverse died but not this one).
This is why you always test an outlet with a lightbulb before doing electrical work.
Honestly it didn’t actually do much beyond just small muscle twitches in my hand. I only realized what happened after I let go of it and my hand still felt a little funny. Definitely do not recommend but at least it was a 240V outlet or anything like that.
The EM coming off AC mains makes a non contact detector hard to fool and it's such a simple device that even cheap knockoffs are reliable.