In homeowners insurance, real property refers to land, and any structures attached to it (like your fence, garage, garden, etc.) including your house.
Breaking down real property
Also known as real estate, this term refers to property that can be owned, occupied, transferred, or sold legally. As such, it’s something that your homeowners insurance will cover, as laid out in the terms of your policy.
Real property refers to the land and any structures (your home, garage, etc.) attached to it. Land also includes vegetation, so if you’re into growing food rather than grass (wow if you are!), that’s considered real property as well.
While real property will be taken into full account when you’re discussing things like home buying and mortgages, it gets a little trickier when it comes to homeowners insurance coverage.
Real property: what's covered, and what's not
Basic (and premium) home insurance policies provide coverage for you home, aka ‘dwelling,’ and other structure on your property, but not your land.
That garden you have? It’s not necessarily covered by your insurance.
Typically you’ll be covered for up to 5% of Coverage A (Dwelling Coverage) for things like landscaping to your lawn and shrubs, but only for named perils like fire, windstorms, lightning, theft, vandalism, etc. Debris removal, for example, is an extra coverage. This type of coverage also helps to recoup costs on things like removing downed trees for up to $1000 (but no more than $500 for each tree) provided they are blocking access to your home or have the potential to cause a hazard, etc.
So let’s say there was a summer storm and a bolt of lightning struck down a tree in your driveway… your insurance company could help you with cleaning up the mess (financially, that is)!
Real property vs personal property
The difference between real property and personal property is that the former refers to stuff you cannot move (gardens, garages, and your house), whereas the latter is moveable (phone, bike, laptops, etc.).
When you purchase a new home, the house itself and the land it’s on (e.g. real estate) is known as real property. When you go to purchase some new home items, say, a new refrigerator, washer, dryer, and TV, all of those items would be classified as personal property.
Alternately, you can think of real property as everything that was purchased in the sale of your home.
So, while the land, home, garage, and shed would have been there when you moved in, the cars in your garage and the tools in your shed weren’t, which means they fall under personal property.
In the same line of thought, stuff like sinks, flooring, and showers may also be considered real property – just double check your policy when it comes to coverage.