Here's the simple (and correct) answer:
Accidental damage isn't covered under AppleCare. It will void the warranty immediately -- however, that can be changed. If you turn yourself in and pay for the repairs (which can be pricey, depending on the situation) your computer will be placed back under AppleCare and will remain under warranty.
Source: I work for an Apple authorized service provider.
That's what I thought, and what my Apple service center said as well. Thanks.