Glossary of Insurance Terms

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MCS-90 - This is the "Endorsement for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980." The endorsement assures that the trucker is using insurance to comply with the financial responsibility requirements of the act.

Maintenance bond - Guarantees that faulty work or defective materials charged to the bond principals will be corrected or replaced. A maintenance bond may be included among the terms of a performance bond.

Malicious mischief, see Vandalism.

Malpractice, see Professional liability.

Managing General Agent (MGA) - An agent standing between an insurer and other agents. The MGA sells to retail agents, who then sell to the consumer. MGAs often are said to have the "pen" because they are given the authority to accept, underwrite, and price submissions received from retail agents.

Manufacturers and Contractors liability (M&C) - The premises and operations liability exposures of manufacturers and contractors covering third parties for bodily injury or property damage negligently inflicted in the course of daily activities.

Manufacturers Output Policy (MOP) - Policy originally designed to cover property of a manufacturer being processed at another company; it covers personal property away from the premises on an open perils basis.

Manufacturers selling price clause - Clause stating that finished goods are valued for insurance purposes at their selling price rather than their cost of manufacture.

Manuscript policy - An insurance policy covering property or liability exposures (or both) that is uniquely assembled from standard or specially created forms to suit the needs of an insured.

Marine insurance - Insurance primarily concerned with transportation exposures and property that is commonly moved around from place to place. In America, the field is divided between Inland marine and Ocean marine.

Maritime coverage - Crew members of vessels are subject to Admiralty Law and may sue their employers for work-related injuries because state workers compensation laws do not apply to them. Therefore, special coverage must be purchased for this exposure.

Market value - The price at which insured property could have been sold just prior to its loss or damage. Along with "cost new minus use deprecation," market value is but another gauge used to determine the loss settlement to which an insured is entitled. The insured may choose the gauge that produces the most favorable outcome.

Market value appraisal - An appraisal to determine the market value of a building and related personal property.

McCarran-Ferguson Act - Passed by Congress in 1945, this act states that regulation and taxation of insurance by the states is in the public interest, and that congressional silence should not be construed as a barrier to state regulation.

Medical malpractice - Type of insurance protecting physicians, surgeons, nurses, and other medical practitioners against claims alleging failure to perform.

Medical payments insurance - A coverage found in auto and liability policies that pays medical expenses to injured persons without regard to liability.

Merit rating - A form of auto rating in which an insured’s past experience as well as anticipated experience is taken into account when arriving at a rate.

Minimum premium - An insurer’s lowest charge for an insurance policy.

Misrepresentation - Generally, misstatement of facts made on an application for insurance. May also be misstatement of coverage made by an agent to an insured.

Mobile equipment - Included for coverage under the commercial general liability form, this term relates to land vehicles used in ways that take them out of an explicit "automobile liability" exposure (e.g., vehicles used only on the insured premises, to carry certain permanently attached equipment, that are not required to be registered, or are designed for solely for off-road use).

Model bill - A bill drawn up for insurance regulatory purposes by the National Association of Insurance Commissioners, with the recommendation that it be implemented by the states.

Monoline policy - An insurance policy covering one subject of insurance, as opposed to a combination or multiline policy.

Monopolistic state fund - Five states have their own system for providing reparations to injured employees eligible under the state’s workers compensation act. Private insurance companies may not compete. The states are North Dakota, Ohio, Washington, West Virginia, and Wyoming.

Moral hazard - As "physical hazard" relates to susceptibility to fire or wind, the term "moral hazard" relates to susceptibility to loss through moral lapse of the owner (e.g.,"Burn the house down and collect from the insurance company before losing it in a foreclosure to the finance company.").

Morale hazard - The term "morale hazard" addresses the issue of an apathetic insured (e.g., "It’s insured, let it burn.")

Mortgage holders clause - A standard property policy provision that creates elements of a separate contract between a mortgage company and an insurance company. Any loss to building or structures will be paid to the mortgage company and insured jointly and any act of the insured voiding coverage will not affect the mortgage holder without it first being given an opportunity to com-ply with the insurer’s needs.

Motor Carrier Act of 1980 - A federal law that de-regulated the United States trucking industry and transferred the enforcement of financial responsibility requirements for truckers to the Bureau of Motor Carrier Safety, U.S. Department of Transportation. Insurance is one method of complying with the financial responsibility requirements.

Motor truck cargo policy - Two forms of inland marine coverage are associated with this title, one for carriers and one for owners. As a carrier, the insured is protected for legal liability relating to property of others in the course of transport. As an owner, the insured is protected for in-transit damage to its own property.

Motor vehicle record (MVR) - An official record of a driver’s accidents and traffic violations kept by the licensing state(s). Often used to determine eligibility and/or premiums for auto insurance.

Multi-line era - During the first half of the twentieth century, insurers were licensed to write property insurance or liability insurance but not both. Two insurers were needed to write automobile liability and physical damage insurance, for example, in a contrivance called a "combination policy." Not long after World War II, states began licensing insurers to write both forms of insurance introducing what was then called the "multi-line era."

Mutual insurance company - A cooperative insurance company organized and owned by its insureds.

Mysterious disappearance - A named peril in some forms. Either theft or unexplained disappearance of covered property from a known location may activate coverage.