Quote Originally Posted by Exclamation View Post
One of my friends dropped his iphone in the toilet (don't know how he did that) but anyways he went to an apple store told them what happened and they replaced it with a new one for free even when he hadn't bought an extra insurance plan of any kind.
Is your friend easy on the eyes? This is Apple's explicitly stated policy on water damage:

If an iPhone or iPod has been damaged by liquid (for example, coffee or a soft drink), the service for such liquid damage is not covered by the Apple one (1) year limited warranty or an AppleCare Protection Plan (APP). iPhone models and iPod models that were built after 2006 have built-in Liquid Contact Indicators that will show (as described below) whether the device has been in contact with water or a liquid containing water.
http://support.apple.com/kb/ht3302

I've known several iPhone owners who found Apple customer support to be merciless in their policies towards replacements. Maybe your friend got lucky?