Personal Property

It would surprise you to know how many homes have all the latest in technological gadgetry, yet have failed to insure the contents of their home against the event of either a burglary or damage. If you want to protect your personal property, you need to be insuring your personal property with a home contents insurance.

What To Insure

You can arrange to insure any (or all) of the contents of your home under a home contents insurance policy. Nevertheless, if you have any personal belongings in your home over a certain £ value, then you should be discussing these with your home contents insurance provider – as in most cases property over a certain value needs to be declared independently (and, in certain cases, such as with expensive diamond engagement rings, they may need to be insured independently).

Itemise Your Possessions

Once you have decided that you want to purchase home contents insurance you need to take an inventory of your home, itemising all of the possessions in the home. A really good tip here is not to move all of your possession into one room and then itemise them, but to go from room to room doing this. This way, your inventory will be broken-down into rooms, should damage or theft occur only to a part of the home. Better yet, you should try to walk through your home with a video camera videoing all of the possessions in that room. You can then keep a copy of the video with the inventory. However, if you do not have a video camera, still-camera photographs of your possessions is better than taking no photographic evidence at all.

How To Value Your Possessions

It is vital that you remember that home contents insurance is insurance against the replacement value of the item that was lost, stolen or damaged. It does not take into consideration any nostalgic value. Therefore, if you have expensive personal property in your home, you should arrange to have these independently valued – preferably by an insurance approved valuer – and a copy of the valuation receipt should be kept with the insurance policy. The value of the other items in your home can either be assessed by the price it cost you to purchase them; or, better, by taking a trip down to the local shops and seeing how much each of the items would cost you to buy – as this is the amount you’ll be paid if the item is lostdamaged.

How To Arrange The Home Contents Insurance

Once you have valued and itemised the possessions you want to insure you can then log onto the internet and get some online home contents insurance quotes based on the value and possessions you want to have insured under the insurance policy.

What Will The Insurance Premium Cover

Ordinarily the insurance policy will cover you in the event that the possession insured is lost, stolen or damaged. Damage in this case can be the cause of a natural event, such as a bad storm or flooding, or a because of a boiler bursting. You should also read your policy carefully, as some home contents insurance policies cover items which are lost outside of the home – for example, if you are transporting them in the car.

Let’s take a look at Personal Property as it compares to Real Property. This is a topic that comes up a lot when a real estate transaction gets difficult and the two parties (buyer and seller) begin to argue over what stays in the house and what doesn’t according to the contract and law.

Personal property is defined as all property that can be owned and does not fit the definition of real property. In other words, if it is not real property then it is personal property. An important distinction between the two is that personal property is movable. Personal property is also referred to as chattels. For those of you who like to work on expanding your vocabulary.

Next let’s look at some examples of personal property including manufactured housing, plants, crops, and classifications of fixtures.

Manufactured Housing is defined as dwellings that are not constructed at the home site. These are normally trucked in and placed on the property. For those of you breaking down the word manufactured, and wondering why all homes aren’t considered manufactured, since they are after all manufactured think of mobile homes as manufactured. Here’s the tricky part, if the manufactured home has been attached to the property then it is REAL property, if it is just sitting there and hooked up to utilities then it is PERSONAL property. Why would it matter well, if it is REAL property, then the property taxes are higher because the government sees the homes as essentially adding value to the land it sits on.

Plants and Crops There are two categories here and both have their differences. Trees, perennials, shrubbery and grass that do not require annual cultivation are considered real property or real estate. And these transfer with the sale of the property. Crops on the other hand that are harvested on an annual basis, are considered emblements. Or personal property and in the sale of the property, the crops that are being produced stay with the seller for that current harvest.

Here are some additional details… if an item on the land, lets say a tree (which is real property) is cut down and separated from the land (called severance), then it becomes personal property. It is also possible to do the same thing but the other way. If the tree that was cut down is used to build a home on the property, through annexation, it become real property.

Fixtures – these are often the hot topic in the sale of a home because sellers often take their fixtures with them when they move, and that is against the agreement set out by the contract. Knowing what a fixture is, will help you understand what to expect stay with the home and what does not. A fixture is personal property that has been affixed (attached) to the land or building and it becomes real property. Remember real property stays with the home when it is sold.

How do you test if an item is a fixture or personal property Here are the three basic tests the court will use to decide.

1. Method of Annexation – how permanent is the method of attachment Can the item be removed without damaging the surrounding property

2. Adaptation to Real Estate – Is the item being used as real property or personal property For example a fridge is normally considered personal property because it can be removed easily. However if the refrigerator has been adapted to match the kitchen cabinetry, it become a fixture.

3. Agreement – Have the parties agreed on whether the item is real or personal in a purchase offer.

The overall rule is to determine, what is the purpose of the fixture Is it’s function to be personal property or a real property.

Trade Fixtures are the exception to the rule. A trade fixture is property used in the course of business. Often it will be attached to the property and resemble real property. However, if it is something used as part of the seller’s trade, it is considered personal property and does not stay with the home.

Often home buyers will be looking at homes and what draws them to the home will be certain aspects of the home. Fixtures such as entertainment centers, backyard gazebos and surround sound speakers are often considered fixtures and real property that will stay with the home. However a home owner may consider those items of great value and may be planning on taking them to their new home. It is very important to identify what fixtures you want and expect to stay in the home and put those items in the purchase agreement so everyone will be on the same page and in agreement from early on.