By-law
What Does By-law Mean?
A by-law is a law, rule, or regulation established by a corporation, local government, or other organization. In the context of insurance, certain by-laws can impact the value of insurance claims. To help policyholders safeguard against these risks, many insurers offer by-law endorsements.
Insuranceopedia Explains By-law
By-laws can sometimes impact insurance coverage. For instance, if someone owns an older car that gets only 10 miles per gallon and it’s totaled in an accident, a by-law might require new cars to achieve at least 25 miles per gallon. In such a case, the auto insurance may not cover the full cost of a newer model that meets this standard. Without a by-law endorsement, the person might have to pay the difference between what the insurance covers and the cost of a vehicle that complies with the by-law.
