Motor Club Announces Income Before Federal Taxes as of Dec 31, 2000

    PARAMUS, N.J., April 2 Motor Club of America ("the Company") today reported its income
before Federal income taxes for the fourth quarter ended December 31, 2000 was
$646,439 compared to a loss before Federal income taxes of $1,511,095 in 1999.
Income before Federal income taxes for the year ended December 31, 2000 was
$2,999,677 compared to $102,146 in 1999.  The Company also announced that it
would report its net income when the audit of its financial statements was
complete, which is expected to be no later than April 17, 2001.  Being
reviewed is a complex tax item related to a subsidiary that was rendered
insolvent in 1992, but is still required to continue to be included in its
consolidated Federal tax return.  The Company reported that as to this tax
item, any present or future tax liabilities established would have no impact
on the operations, cash flow or surplus of the Company's active insurance
subsidiaries or on consolidated income before Federal income taxes.  Book
value at December 31, 2000 is presently estimated to be approximately
$13.40 per share.

    Revenues for the fourth quarter and year ended December 31, 2000 were
$23,329,714 and $90,127,147, respectively, as compared to $17,708,809 and
$61,067,719 in the same periods in 1999.

    Income before Federal income taxes in 2000 improved as a result of a
$3,748,269 improvement in underwriting results from insurance operations.
This was the result of strong growth and improved loss ratios at the Company's
Preserver Insurance Company subsidiary, economies of scale gained from our
acquisition that enabled Motor Club of America Insurance Company to improve
its expense ratio and sharply lower expenses at North East Insurance Company.
Mountain Valley Indemnity Company's results were largely as anticipated.  In
1999, Motor Club and Preserver had incurred $638,000 in losses and expenses
related to Hurricane Floyd, which struck New Jersey in September 1999.

    These improved underwriting results offset a $1,419,000 increase in
interest expense related to the Convertible Subordinated Debentures and
Promissory Notes issued in 1999 and 2000, respectively, related to the
Company's acquisitions of North East and Mountain Valley.  Expenses related to
those acquisitions also declined, from $800,000 in 1999 to $354,000 in 2000.

    With regard to the Federal tax item, MCA Insurance Company in Liquidation
and its subsidiaries ("MCAIC") are required to continue to be included in the
Company's consolidated tax return filed with the Internal Revenue Service.
Since the 1992 insolvency, MCAIC has generally continued to generate taxable
losses included in the Company's consolidated tax return.

    Under the applicable rules, the Company is entitled to, and has taken
current tax benefits for net operating losses that MCAIC and its subsidiaries
have generated since 1992.  However, to the extent that the Company does not
have positive basis (as defined by the Internal Revenue Code), it may also be
required to pay future tax liabilities (which may offset the current tax
benefit) subject to certain events which may trigger such payments.  To the
extent that the Company has such positive basis, it is able to and has
recognized tax benefit from these losses in prior years.

    Until 2000, the Company has had to record such liabilities once, in 1997,
which it was able to eliminate in 1998 under the rules. Based on tax
information received from MCAIC (which the Company does not control) during
2000, the Company will have to establish deferred tax liabilities for such
future payments and eliminate deferred tax assets that will no longer be
realizable.  Such liabilities are presently estimated to be approximately
$1.9 million, with a corresponding reduction in deferred tax assets of
approximately $875,000.  The Company and its independent accountants are
presently reviewing these amounts.  The Company is presently evaluating
whether such information requires a restatement of prior periods or whether
such information constitutes a 2000 event.  Irrespective of this accounting
consideration, establishment of these liabilities does not require payment
presently, nor is the Company subject to penalties and interest on these
liabilities.

    Based on the current profitability of the Company and its active
subsidiaries, the amount of net operating loss carry forwards that both the
Company and MCAIC have available, and the application of the appropriate rules
to such matters, the Company believes it is more likely than not that such
deferred tax liabilities may fluctuate in the future.  Strategies to mitigate
this future tax liability may be limited, although the Company expects to
continue to review all avenues available to it.

    Accordingly, the Company is making the necessary filings to extend the
time to file its Annual Report on Form 10-K with the Securities and Exchange
Commission pending resolution of this matter.

    Motor Club of America owns and operates five regionally focused property
and casualty insurance companies, including companies that specialize in small
and mid-sized commercial insurance through the Preserver Insurance Group.

    The Preserver Insurance Group consists of Preserver Insurance Company,
which writes small commercial and homeowners insurance presently in New
Jersey, and Mountain Valley Indemnity Company, which writes small and
mid-sized commercial insurance presently in New England and New York.  The
Preserver Insurance Group is rated B++ (Very Good) by A.M. Best Company.
American Colonial Insurance Company plans to commence operations in New York
in 2001, writing commercial lines in tandem with Mountain Valley.

    Motor Club of America Insurance Company writes personal automobile
insurance in New Jersey and is rated B+ (Very Good) by Best.  North East
Insurance Company writes personal automobile and small commercial lines
insurance in the State of Maine and is rated B (Fair) by Best.