How does Protect Your Bubble work with regards to theft/loss?

I'm thinking about getting one of the new iPhones, either the 5S or the 5C. My iPod touch broke and unfortunately I did not have insurance. This time I want to be prepared and so I went to protectyourbubble.com. I was wondering how the company makes sure that they pay out for theft. Does the customer need to provide them with evidence or not? If not, then surely they could lose it and say it was theft because they haven't included loss in their insurance plan. Maybe I could only include theft and then if I lose it I could tell them that it was stolen because of course I don't want to spend money that I don't need to. Thoughts, please.

Bubble rap works extremely well. Use it.