I am sorry your kid had his new iPhone stolen. Sucks. Can happen to the best of us, including everybody in here with some of their judgemental posts and know-it-all attitudes (i said some..). 🙂 gha!
Once you call to report it to insurance, surely they will inform you of your options ~ it seems likely they might desire a police report. I also recommend to not remove the phone from the account so you keep remote control over it the best you can. And it's not a matter of "no need to do that stuff, the police doesn't do anything", it's more to make sure you've covered your butt. Imagine taking them to court if you catch them and their defense is "it was borrowed, judge, .. they didn't even file a police report".
I hope it shows up, and I hope you get it back, and I hope you can sell the phone for some Vegas money.