To make things less confusing I'm going to make up a different story so you can understand it better.
Say I shipped you a amp, and a declared value of $500. The amp gets to you and is broken during shipping. Now.
Do you have to send me that amp back in order for you to get that shipping insurance $$? or Do you keep the amp, file a shipping claim, and also get your $500 back to get another amp?
I am almost posative you need to show a reciept for it, or send it back to teh manufacturer and they will fix it for a cost in which the insurance will cover it. I tried to get this done on a avalanche I sent out and it was a HUGE pain in the azz. It never got resolved, and Chad being the man that he is gave the guy a arsenal instead.