Air India - Refund rejected from Airline and Insurance Company

I, Mr Nitin Kumar, had travelled to Bali in the month of June'**. While returning, I had booked a hopping flight from Air India. Just * days before my return, my flight was cancelled with the remark "Operational reason", and amount refund request was issued by the airline without any discussion. As my flight was cancelled, I had to book a flight at a much higher price and as i result of which I was made to pay an extra amount. As I had travel insurance with Reliance, I was assured that my loss would be taken care. Once I had returned, I had sent an email to the airline and the insurance company. As the reply was not specific, my claim from insurance company was rejected.