Iceland volcano: Will your travel insurance cover you?

(From Guardian Unlimited)

My flight has been cancelled, what happens now?

Under European law your airline is obliged to offer you a choice: you can either cancel your booking and get a refund, or rebook on a new flight. The refund should be made within seven days (although some passengers who had flights cancelled in December's bad weather are still waiting for their money); rerouting should be as soon as possible, unless you agree to reschedule for a later date.

If you opt for rerouting the European Consumer Centre for Services says you should be entitled to meals and refreshments, hotel accommodation (if necessary), transport between airport and …