Insurance does not always send a new phone. Many times it is refurbished. Sometimes, if you exact devices has been discontinued or they are out of stock, they will send you a "comparable" phone. Often, their choice isn't even close.
In this case, OP had phone assessed by company. They deemed it damaged. Will replace. No cost. End of line. Can't send it in and have someone else say it was water damaged. Prove that didn't happen after OP surrendered it...
Not insurance fraud, as he didn't put in a claim to insurance. If OP didn't tell us it was water damaged, but we checked, and saw no water damage, we would replace as well....
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