By-law Endorsement

What Does By-law Endorsement Mean?

A by-law endorsement is an insurance endorsement that covers additional expenses incurred due to specific by-laws or regulations in a given area. These endorsements are typically optional for the policyholder. The by-law regulations may be set at the town, city, state, or federal level.

Insuranceopedia Explains By-law Endorsement

By-laws can play a significant role in insurance claims. For instance, if a drunk driver crashes into a 10-foot-long pool house and a new by-law mandates that pool houses must be at least 12 feet long, the insurance company may not cover the cost of extending the pool house by 2 feet to meet the new requirement. Without a by-law endorsement, the property owner would need to cover this additional cost, though the insurance company would still cover the rest of the damage. In general, what homeowners insurance covers is the cost to rebuild what was damaged, not the cost to bring the structure up to current building code. Buyers comparing homeowners insurance companies should check whether ordinance or law coverage is included in the base policy or sold separately.