Because except that there are essential files on your iPhone that you can't afford to lose, there's no point in spending extravagantly to repair a water-damaged iPhone. Also, keep in mind that some insurers won't repair or return your iPhone when you apply for the warranty, but instead send you a refurbished replacement iPhone. Your iPhone has a built-in liquid contact indicator, which you can use to check if your iPhone has been exposed to water or not. For example, the cost of repairing iPhone X water damage is likely to be lower than the cost of repairing iPhone 11's water damage.
For example, the cost of repairing water damage to the iPhone XS and the iPhone XS Max could be lower than those of non-rugged devices, as both have an IP68 rating for immersion of up to 2 meters.