You call them and tell them what happened. They'll fax or email you some forms which you take with you to the Apple service provider to have them fill out.
Then the service provider does the repair, and you can either a) pay yourself, and Safeware sends you a refund check, or b) arrange to have Safeware pay the service provider directly. Option b takes a lot more paperwork.
When I had to make a Safeware claim, it was totally hassle-free. If you do a search in this forum for Safeware, you should be able to find my whole experienced typed up.
tooki