Updated: 09 June 2023

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.

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