You can call customer service and report the phone as lost - they can suspend and deactivate the phone (so no one else can activate it) until he can get it replaced. (800-922-0204). Or you can cancel the line - that's an option, but it may cost if there is time remaining on the contract. A better option would be to suspend and then reactivate with a different phone.
You don't have to buy a new one; if there is a used phone (Verizon branded) you have laying around, or a friend has one, you can use that. Or buy a used one off eBay - there are some good deals. Just make sure it is Verizon branded and has a clear ESN - customer service can help you there too.