A water-damaged phone would presumably also have a water-damaged battery...so they should have sent you a new battery along with the phone.

Usually if you break something, but the battery is still good, they send the phone and nothing else.

Insurance is such a crapshoot though. I was supposed to have a BB 8830 replaced via insurance, and it never showed up so after 10 days Sprint just gave me a new one in the store. They let me keep everything except the phone.