Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
I'm guessing they want the damaged item to help prevent fraudulent claims, so you can't just say your item was damaged when it wasn't & get your money back for an item you're still using. I'm also guessing this is why the coverage doesn't include lost items, only damaged or stolen. I called the AMEX claims dept and explained that I would have to give the phone to Apple in order to get the less expensive replacement, she made a note in my file and told me any paperwork from Apple saying it was water damaged should be enough. I do have that paper from Apple. We shall see!

Please share when you find out. I'd love to know.
 
Claim Approved

Just wanted to update with the final outcome from my AMEX claim. After sending a couple rounds of paper work my claim was approved for the amount of the replacement phone. Did not need to send the phone to AMEX, explained to them that Apple took it. I'm very happy & replacement phone is on strict no swimming orders.;)
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.