Ok. We were both wrong.
I did some Goggling and found this:
The official policy is:
- Out of warranty iPhone 4 repairs are now $149 (down from $199)
- Out of warranty iPhone 4S repair is $199
- Applecare+ "damage due to handling" is $49 (limit 2)
- If the Genius decides it's a warranty-covered issue, it's free.
If your iPhone is out of warranty and you have a battery issue, it's $79 for their battery replacement service. But with the service, you actually stand a good chance of walking out with a "like new" replacement phone.
So let the genius make his own determinations. Don't volunteer too much info unless asked, and then just tell the truth.
I guess I remembered what I paid incorrectly and the rep didn't explain to me that the price is higher on the newer phone (iPhone 4S was the latest model at the time and I was replacing the 4). For the more recent phone they charge you $199. That means without the insurance you would have to pay $199 for a replacement until the iPhone 5S is released, at that point it would drop down to $149 for your iPhone 5.
Going by these numbers Apple Care Plus is a better deal then I had thought. The thing you would need to keep in mind is that the limit for the $49 replacements is 2. They won't keep replacing your phone after that for the reduced cost. So don't go breaking it on purpose if you believe you are clumsy enough to drop it on occasion.