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Why doesnt insurance give u a brand new phone

So i was an idiot and spilled alil drink on my droid. It works fine expect that it shuts off once in awhile. The reps at verizon said that I have to go through insurance and that I prob wont get a new phone. I don't get why if i'm paying for the insurance i cant get a brand new phone? Shud I claim the phone or jus stick it out with my lil water damaged one?
 
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