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The insurance covers the line not the phone.
That means, if you already have insurance and start using a different phone, it is considered covered.
The insurance company reserves the right to request a copy of the reciept proof of purchase. I don't completely understand how that works, if you bought it from a friend.
If you really have questions, contact Asurion directly.
The number for Asurion Mobile Insurance is 888.562.8662.
It's fraudulent to replace a phone for a pre-exisitng condition, but it would covered for future issues.
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