Customer falls on computer and wants warranty

A customer came in with a computer that was crushed. The customer fell down with the computer in his hands and he landed on the computer. We just rebuilt the computer 2 weeks before. He requested that we look at it and see what we could do. So we check it in and diagnose the computer. The case is destroyed and the motherboard is damaged. The customer is expecting warranty repair on the system because he told me as much. I told him that we would look at the computer and see what the problems are. He is a very good customer that we have been doing business with for along time. My choices are call him and tell him all of the problems with the pc and make him pay for everything and lose him as a customer or take care of the motherboard under warranty and charge him for the labor and the case and keep him as a customer. I will be going with option 2, but what would you do? Better to break even on it and keep him as a customer than to lose any future business.
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