what should happen under EU rules is that the airline should give you the choice between a refund of your ticket or alternative transport onto your final destination, meals and accommodation (if required) and communication facilities plus a level of compensation dependent upon the length of the journey usually €250 or €400.

What has been happening in practice with Ryanair is they have been completely ignoring this as Aviatrix says, and doing exactly what they did before - refunding your ticket, leaving you to buy a new one at whatever price is available on the day or offering seats on their "next available flight" whenever that may be. So if you got one of the 0.01 + tax tickets, you might suddenly find yourself paying out quite a lot more than the value of the refund.

My travel insurance, in the event of a cancellation, would basically step in to cover what the airline doesn't -eg hotel accommodation, cost of buying new tickets.... what I am unclear on is whether my insurance is less likely to pay out for these things than before because of the EU legislation - ie before it was a grey area, so I could claim on travel insurance. Now under European law, it is very definitely the airlines responsibility, so I don't see my travel insurer wanting to pick up the bill for stuff they should have done