Once the phone is reported lost, and you have the replacement from Asurion, that 'lost now found' phone is permanently on the lost stolen list. The ONLY time you can reactivate it is when you report it lost, do not send off for the insurance claim, and find it: then you can just long on to your My Verizon online and UN-LOSE (lol) it. The phone is now just a Droid version of an iTouch.
Since the phone is not longer able to make calls or connect to the 3g cellular network, no one cares. You can use the phone on Wifi only and it's now the Droid equivalent of the iTouch!
Sent from my ADR6350 using DroidForums