That's because it's a warranty - it covers faults, not damages. If you want apple to fork out for a new one because you've dived into the sea with the phone on an armband then you need to pony up for Apple Care +
https://support.apple.com/en-us/108039
> Because it’s not Apple.
It is.
https://support.apple.com/en-us/108039
> These iPhone models are splash, water, and dust resistant and were tested under controlled laboratory conditions...