Hi
I actually managed to get some money out of my insurance company (Insure & Go) for my loss of deposit. We had villa only last summer and the balance payment was due 13th April. The villa company said as it was villa only, so long as Spain wasn't locked down, they would be providing the villa so we had to pay in full even if we didnt or couldnt travel. Due to my T1 we decided it would be unsafe to travel and rather than lose the £2k we chose to lose the £340 deposit. Initially the insurance company said we had chosen to cancel it so no refund. However I argued that as I had had medical screening and paid extra premium due to having T1, it would have been too dangerous to travel. A month later they paid my claim without any further ado.
I'm unsure if it is the same thing as you're experiencing?