yes it's called your imei will be flagged so it won't work and or so they know you lied. Than you go to jail for insurance fraud.
So how would that stop someone from actually doing it? If the reason they claim said "lost" phone is due to them dropping and breaking it, they likely aren't gonna want to use the old one anyway. Sounds more like a way to avoid having to pay full retail price for a replacement rather than a way to have two working devices both for the same price.
Cept you could always get a replacement for what was claimed a lost phone, which then "turns up a few weeks later." only way to screw up is leaving on the lost phone while the replacement is on the way.
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