No, the standard AppleCare does not cover impact damage or accidental breakage. The phone company may, however. Leo has seen Apple replace broken phones for about $200. When bringing in a broken iPhone, he should make a genius bar appointment. The geniuses have a lot of flexibility, and may be able to help depending on the situation.
If he were to get AppleCare+ for iPhone, that will cover damage. It's $99 and he'd get up to two replacements/repairs a year for about $49 a piece. But he'd really have to get it when he buys the phone.