By-law protection in your insurance policy is an optional coverage that may be included at a minimal monthly cost. This element gives you added protection in the event of an insured peril should your home need repairs that involve upgrading your building to meet the minimum building codes of the times. For example, if you own a home that has a fire and it is completely destroyed, you may require certain upgrades. For instance, nowadays, electrical outlets in your home should be marked “tamper-proof.” These new outlets have a sliding mechanism where the prongs from appliances and other electrically-powered items plug into. This provides protection from electric shocks, should a conductive material be inserted accidentally. If you have young children, these outlets provide your family with the security of avoiding nasty electric shocks when your toddlers stick things into the outlets.
Since these are now the standard, this would involve an upgrade to your building. If for example, these outlets cost about $5 per unit, and you have perhaps 150 outlets in your home, this adds up to an additional cost of $750, above and beyond standard coverage to return your home to its pre-disaster state. If you have opted for by-law coverage, you are entitled to have these extra costs taken care of by your insurance policy.
Bylaw protection coverage amounts vary from insurance company to insurance company and from policy to policy. It is advisable to check with your insurance agent or broker to find out what coverage options are available and if you require additional coverage. It is recommended that some bylaw coverage be purchased, but the amount of coverage you may require will depend on how long ago your home was build or upgraded/renovated, and how often building codes are upgraded and brought into law in your particular province, state, or municipality.