Your travel insurance policy will cover you for Icelandic ash
With the ongoing problems relating from the fallout from the volcanic ash (pun intended), World First has set out how it intends to respond to the claims its policyholders will be making in the next few weeks here.
To summarise, if you are returning to the UK with an EU registered airline, they have a legal obligation to look after you - even if they might try to wriggle out of it. If you are leaving or were intending to leave from the UK, either World First or your airline will cover you. Read the policy for details on how to claim. This is not the case for all travel insurance companies, see here for more details.
It goes without saying that if you purchased your policy after the no fly policy started, you won't be covered. However, if you had the foresight to purchase an annual policy, you will be covered when the next unforeseen crisis occurs!