We agree with @MarcZeller ‘s idea that we should not extend the SM to Aave V2 on the Polygon and Avalanche Network. We should support V3 instead because V3 is much better than V2. Therefore, when V3 is battle-tested enough, V2 should fade away.
For ARC, the question we should ask is whether the ARC users participate in locking the AAVE/ETH in the Safety Module contract. If yes, then the SM should cover for ARC market because they participate in the insurance for the Aave Protocol. If not, then the SM should not cover for ARC market because the users do not contribute to the Safety Module; thus, they should not be compensated for a shortfall event.