Definition - What does By-law mean?
A by-law is a law, rule, or regulation established by a corporation, local government, or another type of organization. In the context of insurance, some by-laws may affect the worth of insurance claims. Therefore, many insurers offer by-law endorsements as a way for policyholders to protect themselves against by-law risks.
Insuranceopedia explains By-law
By-laws can occasionally affect insurance coverage. For example, if a person has an old car that only gets 10 miles per gallon and is totaled in an accident, a by-law may state that new cars must get at least 25 miles per gallon. However, the person's auto insurance company may not cover the full cost of a newer model car with that capability. Without a by-law endorsement, the person could be stuck paying the difference between the amount the insurance company will cover and what the by-law dictates for new vehicles.
Top Reasons to Forgo Mortgage Protection Life Insurance