My iphone got wet and although it is switched off and the sim card is removed, it is still showing as online on icloud so I can't disable the find my phone to enable me to claim on the insurance. If I erase the phone from icloud, (by clicking on the x next to the device) what does that mean to my data on my phone when I replace my phone? Does this action of deleting the device from icloud just mean that I have only disabled the find my phone app?
When you are not able to remove the iPhone from Find my Iphone in iCloud, try turning on the device and then try to disable Find My iPhone with a mac or pc.
When you erase the iPhone via iCloud, all your settings will be deleted. To place all your data on a new iPhone, you need an iCloud backup or iTunes Backup.
Contacts, photo's, mail, ... Are synced to iCloud by default when logged in on an iDevice. Logging in to iCloud on a new device will fetch all data from iCloud and place it in your photo's, mail, agenda, contacts, ...