ummm... don't see why this is such a problem. they probably won't give you a new phone but what they will do is offer to repair the phone. its not $700 down the drain its only whatever they're gonna charge for the repair which I'm guessing shouldn't be more than $100-$150. sure as hell better than $700.
The bigger the phone screen the easier it is to crack. But I keep my large touch screen HTC and nothing has happened *touch wood*