SquareTrade Warranty denies a claim on my cell phone Internet Indiana

I have purchased a brand new Motorola L2 on ebay and immediatelly got a coverage from SquareTrade.com.

A couple of weeks ago my phone started mulfunctioning - the phone will shut down or restart randomly, sometimes completely on its own, sometimes just a push of a button or sitting the phone down on a table will trigger the shutdown/restart.

I filed a claim with SquareTrade and this is the response I received:

" ... Based on your description, we have determined that the issue described in your claim is not covered under the Accidental Damage portion of your SquareTrade warranty.

This issue stems from the unit being dropped.

Accidental or liquid damage that is covered under Accidental Damage from Handling is considered any damage sustained by the handling of the item. Because the item was not in your possession or in your hands when the accident occurred, according to the Terms and Conditions of your contract, this is not eligible for coverage ... "

I fired an email right back two days ago, haven't heard from them since.

Michal
Muncie, Indiana
U.S.A.