Arizona Adjuster Practice Exam

What is the basic purpose of the MCS-90 endorsement?

1. To enhance coverage limits

2. To comply with the Motor Carrier Act of 1980

3. To exclude certain types of cargo

4. To adjust premiums based on mileage

The correct answer is: To comply with the Motor Carrier Act of 1980

The basic purpose of the MCS-90 endorsement is to comply with the Motor Carrier Act of 1980. This endorsement is specifically designed to provide liability coverage for motor carriers that operate commercial vehicles engaged in interstate commerce. Under this federal law, motor carriers are required to demonstrate financial responsibility, which the MCS-90 does by ensuring that there is a minimum level of liability insurance available to cover damages that may arise from the operation of the vehicle. In practical terms, the MCS-90 endorsement acts as a safeguard for the public by providing assurance that funds will be available to pay for certain liabilities, even if the insured policy does not cover those liabilities due to policy exclusions or limitations. This ensures that individuals and entities harmed by the operations of commercial motor carriers have access to compensation under defined conditions, maintaining a level of protection for the public. The other options do not accurately reflect the primary function of the MCS-90. Enhancing coverage limits does not align with its purpose, nor does it relate to cargo exclusions or premium adjustments based on mileage. Therefore, the relevance of the MCS-90 endorsement lies in its role in compliance with federal regulations that mandate financial responsibility for commercial trucking operations.