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MACHINE (COMPUTER) ISSUANCE

The preparation of policies and endorsements by computer printout. (See Data Processing.)

MAGNETIC-INK CHARACTER RECOGNITION (MICR)

A computer technique used in reading numbers of a specific size and configuration which are printed in an ink mixed with finely ground iron powder which can be magnetized and read by special reading devices. This method is used primarily by the sorting and recording of the millions of checks processed daily, a job which would be totally impossible if left to manual handling. (See also Optical-Character Recognition--"OCR".)

MALFEASANCE

See Malpractice.

MALICIOUS MISCHIEF

Willful damage to or destruction of property with malice. Vandalism results in the same damage, but the malicious intent is somehow absent, or unproved. Although the definitions are historically different ("Vandalism" at one time referred to damage done to works of art, for example), the two terms are used almost interchangeably today.

MALPRACTICE

Failure to exercise the degree of skill which could normally and reasonably be expected of a professional person. Improper or illegal treatment, as in medicine or surgery, including omission of indicated treatment. Malfeasance (mal-feez’-ance): Unlawful or wrongful action, especially by a public official. Misfeasance (mis-f eez’-ance): Failure to perform an act required by law; improper performance of a lawful act.

MANDATORY INSURANCE

A type of insurance required by statute but more in the vein of pointing to an imposed rule. Stops short of definite implication that severe penalties for non-compliance will result. Example: some states 'require’ automobile liability insurance, but do not require a policy or other evidence of financial responsibility to be on file with the state motor vehicle department. In this case it is possible for an individual to operate a motor vehicle without insurance--that is unless he becomes involved in an accident or is charged with a violation. If it happens, the penalties range (depending on the state) anywhere from a small fine and a slap on the wrist to a heavy fine and a requirement to file evidence of financial responsibility. In states with "mandatory" laws, some risk categories (repair garages, public or livery services, taxi and other similar services) which require special licenses to operate, must show evidence of insurance or financial responsibility with the motor vehicle department in order to obtain and maintain their licenses to operate. (See also Compulsory Insurance, Financial Responsibility.)

MANUAL

A book containing rules and rates covering a particular field of insurance (Fire, Plate Glass, Inland Marine, etc.). It is usually published by a rating bureau having jurisdiction, an insurance company to cover a special program, or a private publisher such as SIMPLA-FAX, which publishes digests of rules and pre-figured premiums and rates.

MANUAL RATES

Rates set forth as the basic cost of units of insurance as shown in the particular manual(s), promulgated by Rating Organizations having jurisdiction, or by a company itself. These rates (or premiums) are usually subject to modification by surcharges or credits for increased amounts or limits, or above or below average exposure to loss. Contrast to Judgment or Experience Rates.

MANUFACTURERS’ AND CONTRACTORS’ LIABILITY ("M. & C.")

A form of insurance covering liability of insureds for bodily injury or property damage (except to insured’s employees) on or away from the insured’s business premises or shop operations.

This form is generally used for an insured whose operations away from owned or rented premises are substantial, such as a heating, plumbing or electrical contractor. Premium is usually based on payroll, although in come cases receipts.

Coverage is not provided for damage to property which is owned by, rented to, or in the care, custody or control of the insured. For example: If an installer of Venetian blinds should accidentally knock over a lamp belonging to a customer when bringing the blind into the room to install it, there would be coverage, for the simple reason that the lamp was not owned, rented to, or in the care, custody or control of the insured. Completed Operations Coverage is also excluded. (See Completed Operations.)

MARINE EXTENSION CLAUSE

Provision in Ocean Marine policies which provides automatic continuation of coverage at no additional premium when transit is interrupted, delayed or suspended because of circumstances beyond the control of the insured.

MARINE INSURANCE

See Ocean Marine, Inland Marine.

MARINE PROTECTION AND INDEMNITY INSURANCE

See Protection and Indemnity.

MARINE SURVEY

See Survey.

MARKET VALUE

The amount of money a seller may expect to receive from the sale of real or personal property, service or securities at any given time.

MARKET VALUE CLAUSE

An agreement (not permitted in all states) providing that, in the event of a covered loss, stock (merchandise) is to be valued at its selling price (whether sold or not). Clause is limited to stock the value of which may at any date be determined when it is of a kind which is traded on an established exchange.

MARKETING REPRESENTATIVE

See Special Agent.

MASS MERCHANDISING

A plan of insurance covering certain lines of insurance which is offered under the auspices of a large employer or other homogeneous group, such as a labor union or fraternal organization, where a large number of persons are covered by one insurance company with the idea of convenience (principally payroll deduction and economy).

Although this marketing concept has been used for many years in the Life and Accident and Health fields, it has been applied to automobile and homeowners since 1968.

The employer’s willingness to allow solicitation on company premises and time, and to make the necessary payroll deductions are naturally important to the success of any such plan.

There has been a natural antipathy toward such plans by independent agents, most of whom predict that the insured will suffer by loss of counseling service and assistance, particularly at the time of a loss; and also, that the company which engages in mass merchandising, supposedly for the benefit of a large group, should accept all those who wish to participate in the program, "dogs" and all, and forego the traditional risk selection.

MASTER POLICY

A single policy issued to cover a large number of risks under identical coverage, certificates being issued as needed for individual risks, with reference to the "master policy."

MATERIAL FACT

See Concealment, Perjury.

LIBEL

The defaming of another by written or otherwise published word. Slander is also defamation, but by word of mouth (orally; spoken.) Both terms are subject to interpretation under law, but, generally speaking, in either case malicious intent must be shown. Relatively recent court decisions have in some instances denied the right of redress to well known public figures. Strangely enough, it has not always been necessary to prove that the charges themselves are false. In Ocean Marine, "Libel" means to bring suit against a ship and/or its cargo.

MECHANIC’S LIEN

See Lien.

MEDIA MARKETING

Direct solicitation by an insurance company, using media other than agents---television, radio, direct mail, etc.--to sell insurance.

MEDICAL EXPENSES

Term (also sometimes known as "allowable expenses") means reasonable charges incurred, for reasonably needed products, services and accommodations, including, but not limited to, those for medical, surgical, dental and hospital care, nursing services, ambulance services, X-ray, prosthetic devices, laboratory fees and drugs, rehabilitation, treatment and care. "Medical Payment" generally refers to benefits provided under Automobile and Premises Liability policies, plus Section II of the Homeowners Policy. See Medical Payments.

MEDICAL PAYMENTS

1) Automobile: Pays for medical payments up to the limit specified for injuries sustained in connection with an owned motor vehicle by the -insured, members of his family and/or others, regardless of negligence on the part of the insured or any operator of the motor vehicle. Covers any person while riding in, getting into or out of the insured’s automobile. Coverage also extends to all members of the insured’s family who reside in his household with regard to any non-owned motor vehicle, or being struck as a pedestrian by any non-owned automobile. 2) Premises: Pays for medical expenses up to the limit specified for injuries sustained on, and in connection with premises owned by (or rented to) the insured, by persons other than the insured, resident members of his family, his employees, (including domestic or resident) who are covered or required to be covered under Worker’s Compensation or tenants (or employees of tenants). As in Automobile Medical Payments, negligence on the part of the insured need not be shown. (Ed. Note: As in other sections of this work, the information given above on Medical Payments is to be used simply as a guide, and in no way intended to be considered technically or legally exact or complete.)

MEDICAL/SURGICAL PAYMENTS, IMMEDIATE

See Immediate Medical/Surgical Expenses.

MEMORANDUM OF INSURANCE

See Certificate of Insurance.

MENU

A display of the various programs contained in a computer.

MERCANTILE OPEN STOCK POLICY

See Open Stock Burglary Policy.

MERCANTILE REPORT

See Credit Report.

MERCANTILE SAFE BURGLARY

This policy covers loss of money and securities (excluding manuscripts, records and accounts) for burglary or attempted burglary, and when all doors of the safe and vault are locked by all combinations and time locks, at all hours, whether the premises are open for business or not. (See Money and Securities Broad Form, Open Stock Burglary Policy.)

MERCHANDISE

Finished goods held for sale.

MERIT RATING

A system of determining a rate based on the known past experience of the individual risk, or of a large group of similar risks.

MEXICAN AUTOMOBILE INSURANCE

Mexico does not recognize an automobile policy written by any U.S. Insurance Company in satisfying Mexican Financial Responsibility laws. Visitors to Mexico would be well advised to purchase at the border special short-term policies issued by Mexican insurance companies so as to avoid difficulties with the local authorities and detainment following an accident or violation.

MINIMUM PREMIUM

See Premium.

MINIMUM RATES

Also known as Class Rates, minimum rates are used in fire insurance to cover those classes of risks which fall into general categories, such as dwellings and contents and small apartment buildings and their contents. On larger risks, such as mercantile, manufacturing and larger apartment buildings and many dwellings in congested areas, the Rating Bureau having jurisdiction promulgates a Specific Rate for the building and contents with particular regard for construction, housekeeping, use, grade of protection, etc. (See also discussion on Rates.)

MINIMUM RETENTION

The minimum amount of premium kept by the insurance company in the event of short rate cancellation.

MISDEMEANOR

A crime or offense not usually characterized as 'vicious’ and therefore not a (see) Felony.

MISFEASANCE

See Malpractice.

Representing a material fact affecting a policy or a claim as true, when in reality it is not true; lying. (See also Concealment.)

MONEY

As used in insurance, "Money" means domestic or foreign currency, coin, bank notes and bullion. Can also mean unissued registered checks, cashier’s checks, money orders and travelers checks.

MONEY AND SECURITIES BROAD FORM

Basically a policy including premises and outside messenger coverage on an all-risk basis on money and securities with limited protection on other types of property. Among the exclusions are dishonesty of insured or employees, accounting or bookkeeping errors and loss of books, manuscripts and records of account. After a loss, it is often possible to recover some of the stolen or lost property from individuals who caused the loss or from others. The Money and Securities Broad Form Policy provides that any recovery shall be applied to indemnify the insured to the degree of recovery. The Company is entitled to deduct any expenses involved in the recovery of such salvage.

MOPED

A Moped is defined as a two-wheeled cycle with a power-assisting engine, with a piston displacement of 50cc or less (or if -electrically powered, with rating of not more than two braking horsepower). Some states require registration, but most do not. All mopeds are subject to motor vehicle laws of the states and are prohibited from use on limited access highways. Homeowners and personal liability policies specifically exclude coverage for mopeds. A number of companies do write moped coverage under motorcycle forms, rating them as 100cc or less. Other sources are specialty-line writers with specially designed moped policies.

MORAL HAZARD

A condition of the character of the insured, the circumstances in which he finds himself, or a combination of the two resulting in a increase in the possibility of loss constitutes a Moral Hazard. Carelessness or untidiness on the part of the insured, for example, creates a moral hazard, as would pressure from creditors. If the possibility exists that the insured, in the event of a loss, could receive payment in excess of the value of the property destroyed, moral hazard has entered the picture. Insurance rates and premiums are determined on the basis of Physical Hazards which for the most part can be measured or appraised. Since a moral hazard cannot be measured or appraised, no insurance company would insure a risk with the knowledge it contained such an exposure to loss.

MORTGAGE

A legal claim against real property (as opposed to personal property) guaranteeing satisfaction of financial obligation. A Mortgagee is the lien holder to whom the Mortgagor (the owner of the property) has the obligation. (See also Lien.)

MORTGAGE(S) CLAUSE

A clause which is attached to an insurance policy protecting the interest of the mortgagee in the event of a loss. The Mortgagee must be named on any check in payment of a loss (in addition to the insured) and must also be given advance notice of cancellation. The clause is attached to a policy covering real estate property (buildings).

MORTGAGEE

The lender of money to the owner of real property in exchange for a conditional lien on the property as security for repayment.

MORTGAGOR

The owner of mortgaged property.

MOTOR VEHICLE (ACCIDENT) REPORT

A detailed report of an accident required to be submitted to the motor vehicle department where the accident occurred by any operator involved. State requirements vary as to the extent of property damage involved, but when bodily injury to any extent results, virtually all states require a motor vehicle accident report to be made within a specified time limit.

MOTOR VEHICLE RECORD (MVR)

A detailed account of violations, fines and accidents of an individual operator kept by the motor vehicle department; a driving record history or a transcript thereof.

MULIT-CAR DISCOUNT

Most insurance companies writing automobile insurance allow a discount (usually 15 to 20%) if two or more private passenger automobiles (generally excluding those used for business purposes or operated by young drivers) owned by an individual or by husband and wife resident in the same household are insured in the same policy. Also known as "Two or More Automobiles Discount."

MULTI-PERIL POLICY

MUTUAL INSURANCE COMPANY

An insurance company owned by its policyholders who share in its profits, if any, through dividends. The dividends are based on a percentage of premiums paid by the policyholder, and can never be guaranteed in advance. In former years, the policyholders of a mutual company were also liable to share in its losses through assessment. These were holders of so-called Assessable Policies. Today, most mutual insurance companies have enough reserves so that they are in a position to issue Non-Assessable policies.

MYSTERIOUS DISAPPEARANCE

The loss of an item or items which cannot be explained or presumed to be caused by fire, theft or any other insured peril; an unexplainable disappearance.