Are MacBook Air's covered by warranty with water damage if I have Apple Care? If no, why not?

My water bottle leaked a little in my bag with my laptop and it still works but I noticed there are little subtle lines across my screen. Not entirely sure if this is from the water that leaked but if so can Apple repair if I have apple care? If not, why doesn't apple care cover this, especially due to the fact it is one of the most common accidents to occur? (I have a vague memory of someone telling me water damage isn't covered but just want to double check)