Will this scam work? IPhone / T mobile contract?

So my sister recently upgraded her contract to get an iPhone with out leting my dad know, so he now has to pay an extra £10 a month! As punishment he gave me the phone however my sis now has no phone and is asking me to report mine stolen/lost so she can keep one and i'll get a new one. She says since i have insurance, they'll send me a new iPhone… So will it work? I'm guessing not because then lots of people could just get new pnones this way.
ohh and on their site
http://support.t-mobile.co.uk/help-and-support/index?page=html&cat=LOST_OR_STOLEN_PHONE
it says they can make a lost phone unusable? Who the f* is that possible?

Yes, they can deactivate the phones serial number, and render it unusable.