AppleCare+ With Theft and Loss — The Wildest Scam?

I bought an Iphone 14 with AppleCare+ With Theft and Loss. I was in the backcountry in a location without service for a week and lost my phone. AIG denied my loss claim because I did not have FindMy enabled at the time. I did have FindMy enabled—but my location was not being transmitted because I did not have service. If I had service, I would not have lost my phone. I would have just used FindMy to locate the phone. Wild to me. For some reason, I cannot report the phone as lost mode on FindMy now. I literally. Any idea what the deal is here? Is this a real thing?

To add insult to injury, AIG has a few number available to respond to the claim, one does not work and the second one repeatedly claims they cannot hear me due to the service connection, which is clearly an issue with their own connection. I assume I will not have to pay this insurance company that will not respond to a valid lost phone claim for the next three years for a phone that was lost. Really hard to believe. Anyone else had an issue w/ this AIG company?