What is real property?
If you own real property, you own a piece of land. But you also own whatever is permanently fixed to that land. That might be a building, like your home, or other structures, such a fence or swimming pool. Even vegetation like the trees in your yard can be part of real property.
For the items on your land to be considered part of your real property, they must be immovable or permanently fixed to the land. For example, a temporary shed isn’t real property, but one built on a foundation typically is.
When you look at it that way, other examples of real property can include:
- Permanent outbuildings.
- Water features, including canals and pounds.
- Other resources in the land, such as minerals and oil.
Finally, real property includes a bundle of rights that describe what the owner can do to with their property. The bundle of rights varies by location, but it generally grants the property owner the following rights:
- The right to possess.
- The right to control.
- The right to enjoyment.
- The right to disposal.
- The right to exclusion.
Essentially, the bundle of rights allows you to occupy your real property and decide how to use it and who else gets to come on it. It also includes the right to sell, will, or transfer ownership of your real property to whomever you choose.
Personal property vs. real property
Personal property describes items you can own that aren’t permanently attached to the land, like clothing, furniture, and appliances. In general, you can move personal property from one place to another. Real property, on the other hand, is typically immobile. Only under the rarest circumstances would someone move a house or tree.
Real property and home insurance
Homeowners insurance covers many aspects of your real property. Coverage A insures the structure of your home as well as your trees, plants, and other aspects of your landscaping (Note: the coverage available for landscaping is limited). Other structures on your property are insured through Coverage B.
Land, however, is usually not covered by home insurance. Think of it this way: if your house burned to the ground in a fire, you’d still own the land. That portion of your real property wouldn’t be lost, so it’s not usually included on your homeowners policy.
Real property home insurance claim example
Let’s say you bought a house on an acre of land that also has a detached garage. This plus the bundle of rights you enjoy as the owner constitutes your real property. The contents of the home, like electronics, furniture, and many of the appliances, count as personal property. To protect this investment, you buy a homeowners policy that covers the dwelling, its contents, and other structures, as well as personal liability, loss of use, and medical payments coverages.
Unfortunately, a tornado blows through and destroys your home. As a Kin customer, you have replacement cost coverage on your home, which helps you repair it using materials of the same or similar quality. You also lost a few trees in the storm, but you can apply up to 5 percent of your Coverage A limit to that loss with a cap of $500 per tree, plant, or shrub. Your home insurance also has Coverage C for the contents of your house to the extent of the policy limits.