My iPhone was stolen, will I have to drop my old contract & buy a new one?

My mom told me I have to wait a 3 month grace period, not sure if she thinks that or she was told that. Since it was stolen, do I have to buy a new contract & a new iPhone or will they let me just buy the iPhone and my contract continues? I obviously need a new phone, I was going to just use my old one and sit on it for a while until things get settled with the police, place it was stolen, etc. I know I have to pay for the iPhone out of my own pocket, but they don't expect you to also add on $300 for an early termination to the contract, right?