Mother and daughter are insane (3)
I believe the answer is:
mad
'insane' is the definition.
(I know that insane can be written as mad)
'mother and daughter' is the wordplay.
'mother' becomes 'ma' (Ma is another word for mother or mum).
'and' means one lot of letters go next to another.
'daughter' becomes 'd' (genealogical abbreviation).
'ma'+'d'='MAD'
'are' is the link.
(Other definitions for mad that I've seen before include "Demented or excited or angry" , "Aberrant" , "like the March Hare" , "Deranged" , "Crackers" .)