I have lost more than one cellphone to water damage. I once actually sent a phone of mine through the wash on accident. That was embarrassing.
Normally, though, one could take the phone into their carrier’s store and feign ignorance. “It just stopped working, I dunno?” and walk out with a replacement. Don’t try this with the iPhone.
The iPhone, as well as the iPod touch, have a small white disk inside the headphone jack that, when in contact with water, turns color. Many high-end phones have this as well, usually under the battery or battery cover. Apple has its clearly visible on the outside, so your local genius bar rep can tell right away what happened. Good for Apple, bad for you. Sorry, scamboys.
iPhone water-damage sensor [Apple Insider]