Water damage and adding apple care coverage

I have two phones I have Apple care with one and not the other. The other one had problems so i sent it in they said i have water damage and have.a certain amount of time to add Apple care coverage does this mean if i add it to this phone i can send it back and they will repair or replace it without such a big price , without Apple care they returned it because it was over 500 $ and I couldn’t afford it