Apple Care Theft and Loss - AIG Rejected Claim as they said Find My iPhone was off

Hello, my phone fell out of my pocket and into the sea on Friday night - long story.

I came home and immediately made a claim through AIG and have just received an email from AIG saying that my claim has been refused as Find My iPhone was off. It wasn't off and I can clearly still see that it's on! I came home and marked it as lost from my Mac but it's very much still on, though my phone is obviously showing as Offline as it's very sadly on the bottom of the English Channel somewhere.

I can see from a quick search online that I am not the first to experience this issue. I'm taking screenshots of everything I can think of (including the attached, but also have another screenshot of this with the serial number ). Has anyone else come to any sort of resolution with this?

I feel cheated thinking that I was paying for the best possible insurance through Apple only for this to have happened.