Does Applecare + cover theft?

[FlopTech]

Applecare is for a malfunctioning phone ONLY!

NOT: Physically broken, lost, stolen, water-damaged, etc.

Applecare is NOT insurance.

AppleCare+ (with the "plus") does, in fact allow for two accidental breakage repairs or replacements in two years.
Each repair or replacement costs $49. So yes, it is kind of like a limited form of insurance.

Plain old AppleCare (without the "plus") does not cover any accidental damage.

AppleCare+ is the only option available for iPhone 5, so if you get it you're protected from manufacturing defects as well as two accidental breakage incidents.

Here's a quote from the AppleCare+ page:

AppleCare+ for iPhone extends your coverage to two years from the original purchase date of your iPhone and adds up to two incidents of accidental damage coverage, each subject to a $49 service fee.

Here's the link: Apple - Support - AppleCare - iPhone