In general, most insurers will require their customers to hold a physical driving licence. However, it is worth speaking to your insurance provider to check their position on this. They may require you to clarify your licence status and that you are driving in accordance with the Section 88 requirements with the police, and provided you have proof of that, be willing to insure you.

If your insurer won't cover you while you are driving under Section 88 it is worth speaking to an insurance broker who may be aware of other companies who will cover you.

With regards to your licence application, if you have tried phoning the DVLA without success, you could try writing to the DVLA medical department: Drivers' Medical Enquiries, DVLA, Swansea SA99 1TU or progressing this to a formal complaint via the Gov.uk website.

Another option is to contact your local MP to make a complaint on your behalf.