Aircraft Insurance: What is the Exchange Rate Fluctuations clause?
When you perform either a new or renewal quote we use the information you supply (e.g. aircraft max. take-off weight) to estimate your minimum legal Combined Single Limit requirement. This should ensure you never arrange liability cover at a lower level than the minimum requirement.
However, the minimum requirements are defined at the EU level and are expressed in terms of Special Drawing Rights (SDRs), which are converted daily in to a Euro equivalent. As exchange rates fluctuate, the minimum legal requirements can also change, so there is the risk that if the value of the Euro falls too much, the level of cover an owner has arranged can fall below the minimum requirement.
We have therefore included an ‘Exchange Rate Fluctuations’ clause that means that even if the level of liability cover you have arranged at the outset falls below the minimum requirement during the policy year, you will still be covered for at least the minimum requirement.