thank you for the super response,The free cover is provided by Allianz, and their website says:
If you entered into a policy after 7am (AEST) Friday 29 June, 2018 we would expect that this was done with an awareness of the increased activity of Mt Agung and that this could affect travel. For these policies, where that is so, claims that arise due to volcanic activity associated with Mt Agung (for example, flight delays or cancellations) may not be covered or have reduced cover.
So provided you activated your cover earlier you should be OK
Compare that with eg. Covermore who won't cover anyone for Bali unless the policy is older than Sept 2017!
That is a very good question, and I suspect until someone goes through a claim process we won't know the answer.
My first thought for the Amex travel credit was "I have an invoice for the full amount, it should be covered" but I checked my invoice (for a flight booked with Explorer travel credit) and it says:
Discount - $400.00
PAYMENT RECEIVED: $229.99
So from the insurance PoV we've received a "discount" on our bookings and are only owed for the amount we paid over and above the travel credit.
unfortuantely I havent actiaivted yet, but Iwill do so now,
and the travel credit thing is very very interesting,
would be far easier if it was clear cut,
but better to know rather than get a nasty surprise!