AppleCare Theft claim denied but “Find My” was on

i bought my daughter a new iphone in Dec. ‘22. In May ‘23, it had a green line in the middle of the screen, so she took it to the Apple Store and had it repaired under her AppleCare+ warranty. As instructed by the Apple tech, she turned off Find My Phone during the repair and turned it back on after. Last weekend, her phone was stolen and she was able to report mark it lost. Find My Phone was enabled because we were able to track it for about an hour afterward and have screen shots. She filed a AppleCare theft claim and it was denied - AIG says that Apple informed them that Find My Phone was turned off in May (for the repair) and therefore she’s not covered. She appealed and they denied again. Any advice on how to fix this? I’ve clearly been paying for monthly for the coverage and I repairing a defective phone shouldn’t void the coverage.