I only pay £6 for insurance, but that's only cos I've forgotten to cancel it after 3 months free, and I only pay £15.32 for my HTC Desire S so it's still not much to pay monthly. But the £35+ for iPhones, I can understand why people don't pay for insurance.
Thankfully I've never dropped my phone in water but dropping phones in the toilet seems to be the most common form of phone death.
Sorry mate - at least you're not the only one.
Having said that I'm not sure my policy covers water damage anyway.
This isn't Gaf where being a Junior Member means you're opinion is worth strawberry float all, this is GRCade where nobody has a decent opinion.
PM is your friend.