I think it is possible to get insurance in some form or fashion. It is most certainly insurance fraud and illegal. I don't know state by state but I suspect insurance fraud carries a bigger penalty than stealing a cell phone.
If you paid with a credit card you might be able to get coverage given the short time you owned the phone. Verizon might be able to help you recover the phone.
I believe in Karma, what comes around goes around.....that doesn't mean someone steals from you, you steal from someone else. Do what is right and good things will happen.
Peace,