Here in the UK retailers of all electrical appliances try and sell you what are normally incredibly over priced extended warranties. These are basically insurance polices and often cover against accidental damage and theft. I personally stay well clear of them as more often than not they are not cost effective. But I did take the AppleCare policy as I thought I may need technical advice at some point.
I spoke to Apple and you are all correct, the policy does not cover accidental damage.
With regards to what happened, well... A 2 year old girl who we share our nanny with was thought to be asleep in the spare room/study. When the nanny heard movement in the room she went upstairs to find said child covered in red marker pen. Not only was the girl covered, but so was my Mac. The keyboard, the white casing and the screen. All covered in PERMENANT red marker pen.
The nanny has tried to clean it off with white spirit! It has kinda done the job on the casing and the screen, but on closer inspection the casing is now covered in scratches and there is the odd spot of red that can be seen when looking at white page (such as this one).
You live and learn, and learn to put ALL pens out of reach. Flaming gutted that my beautiful machine is now 'soiled' 😟