I applied for STV via Thai Embassy in London and was asked by email to separately produce $50,000 of insurance. I sent a copy of my standard travel insurance (issued by Post Office) which covered my intended six month stay with cover for £2,000,000. I stated in my response email that this equated to some $2,600,000 - and I received my STV a day or so later.
I was expecting to have to purchase a separate Thai policy but it was not required in my case. There was no specific mention of Covid cover on the document, merely £2,000,000 of medical cover.
The same document was also accepted for the Thailand Pass.