Getting your iPhone wet can be a bummer, especially if it refuses to operate afterwards and you need a new one. Apple is notorious for denying warranty claims based on a simple test, the LCI or liquid contact indicator located at the base of the headphone jack. When this gets wet, it turns red.
Of course most iPhone owners know that Apple doesn't cover soaked iPhones under warranty as this is not considered normal use of the device. Problem is that a class-action lawsuit in 2010 claimed the LCI is overly sensitive or even defective, providing many false positives and preventing iPhone owners from collecting on valid warranty claims. Humidity in a pocket or sweaty palms have been implicated in triggering the LCI to change its color.
Now it seems that Apple has changed its tune, and is training Genius Bar employees to take into account more information about the state of the iPhone in addition to just the LCI color. Corrosion, water marks in the screen, or other evidence may be required to trigger a denial of warranty replacement or repair.
According to the leaked Apple document:If a customer disputes whether an iPod with an activated LCI has been damaged by liquid contact and there are no external signs of damage from corrosion, then the iPod may still be eligible for warranty service.
Now assuming this document is real, this isn't an excuse to go crazy with your iPhone at the beach. Although the wording does seem to add flexibility for an Apple employee to handle situations on a case-by-case basis, if the LCI is red you'll be starting at a disadvantage. For those who are worried about liquids ruining their devices, there are several warranty and insurance options to keep your iPhone protected from spills and damage.