We booked flights 2 weeks ago to go to Bali at Xmas with kids. Booked through Flight Centre. We knew that Covermore wasn't covering against Air Australia insolvency from December. I still paid for Covermore Insurance to cover us against other things.
I went ahead and paid for our flights using a credit card, knowing we had free comprehensive cover under the card to cover against insolvency. I did feel uneasy about Covermore not offering protection though...perhaps they saw the writing on the wall!
I'm with Westpac (WBC). If you are in the same boat, call westpac ask for a charge back.
This will start a dispute process whereby WBC will contact Air Australia. In 3-4 days, they will temporarily credit your card the cost of the airline tickets.
Should Air Australia refuse or not be able to return the funds, WBC will notify me in writing and remove the temporary credit. I then make a claim direct with Zurich. Zurich have advised that this process may take between 2 - 4 weeks.
I have been assured that I will get my money back (both from WBC and Zurich) - the uncertainty is when, and from whom.
If Air Australia fails to respond to WBC within 45 days, they will automatically credit my card, and the process ends there...or so I've been told.
Westpac contact number is 1300 651 089.
Hope this helps someone. What aa awful thing to happen to so many people!