Motorola will repair physical damage for free, if the owner can make a compelling argument that the damage was the result of a defect rather than negligence by the user.
The LCD panel on my RAZR cracked within about 10-days of purchase, rendering the screen black. The outer glass did not break. I had dropped the phone a couple of times, though never from a great height and never onto a very hard surface. I've never had a device break with so little "eternal influence" as my RAZR did, and I've had a mobile device continuously since the mid 80s.
My RAZR was insured, but since it broke so quickly I decided to send it to Motorola for warranty repair rather than use one of my two-per-year, $90 insurance opportunities. Initially, Motorola declined my request for free repair because physical damage is excluded from warranty. I escalated the matter and successfully argued that a consumer aught to expect a device to be more robust than mine was, and I stated that the device must have had a defect that caused the screen to break very easily. In my case, the screen didn't go black after being dropped, it did so after ending one call and starting another. And yes, I told Motorola I had dropped the device.
I love the success story that Motorola is (Nokia really ate their lunch a while back, but where is Nokia now, and where is Motorola? I have no idea about Nokia, but Motorola is making the best mobile devices around, IMHO, with the features I want and need: The RAZR + Lapdock is exactly what I've been waiting for for years, effectively turning a mobile phone into a device that may quite possibly make my home computer unnecessary.) I was glad to see that Motorola stands behind their products.
I think the lesson here is this: A device as thin as the RAZR is going to be relatively fragile. If you have butterfingers or are otherwise anything less than gentle with it, and you don't put a *good* case on it (I'm buying an Otterbox Defender for mine, and won't reactivate it until the Defender arrives), then there's a good change you'll break it. But Motorola will listen to reason, and if your RAZR breaks too easily-and there's a reasonable chance that a defect caused the breakage-then Motorola will do the right thing.
NOTE: If you toss your RAZR around, or drop it alot, and it breaks, then you too should do the right thing by *not* expecting Motorola to fix it for free. Just be reasonable with them, and they'll be reasonable with you.
