But if QF has refunded the 126000 QFF points, then insurance may say you have received a refund so not paying for alternate flights, which would be a very disappointing outcome for someone who had planned to travel.
I had a claim with Covermore earlier this year. This was their view. As I was refunded my points, they would not pay for alternative flights as their view was that I should use those points for a replacement flight (notwithstanding the fact that there was no last minute availability in any class).
Anyway, in short, I think there’s enough in this thread to know that travel insurance is effectively no help where you have flights booked on points and those points are refunded to you.
Back on topic, while I do not have any particularly helpful counsel for the OP, I feel for the OP and it is a terrible situation to be put into at the start of a trip.