Definition - What does By-law Endorsement mean?
A by-law endorsement is an insurance endorsement that covers expenses added onto a claim due to certain by-laws of an area. These endorsements are usually optional for the policyholder. The by-law regulations could be town, city, state, or federally regulated.
Insuranceopedia explains By-law Endorsement
By-laws can be very relevant in insurance claims. For example, if a drunk driver crashes into a 10-foot long pool house and a new by-law requires that pool houses be 12 feet long, the insurance company may not cover the construction costs of adding an additional 2 feet of length. Without a by-law endorsement, the property owner would be forced to cover this cost, but the property insurance company should still cover the rest.