It's worth distinguishing between money market funds and money market accounts.
Money market accounts are just a kind of checkable account at a bank. They were invented back in the 1980s when there were rules about the interest that banks could pay on checking accounts, as a checkable account that could pay a higher rate of interest. There's usually a limit on the number of checks you can write per month. Like any bank account, your money is insured by the FDIC, to an aggregate limit of $250,000 for all a depositor's accounts at that bank.
Money market funds date back to the 1970s. They were aso invented as a way to get around the rules about what interest banks could pay on checking accounts, but they are not bank accounts at all; they're mutual funds. They have historically not been insured, but after Lehman Brothers went bust and some mutual funds came up short, the Treasure created a special program to insure money fund accounts as a short-term emergency measure to keep the financial system from self-destructing. I wrote a bit about the details of that plan in a post on the Money fund guarantee program. The key things to remember are that the insurance only covers the balance in your account on September 19, 2008 (the day the plan was created) and that the program is temporary--it'll expire on April 30 unless it's extended for another three months.
