Personal property is essentially any property except for real estate. The main thing that differentiates personal property from real estate is that you can move personal property, which you cannot do with land or buildings, which are permanent fixtures.
Personal property includes everything from jewelry to clothing to home furnishings, and nearly everything else you own, and it is also known as chattel and movable property. For a business, personal property might include office machines and furniture such as computers, desks, company vehicles and other property and equipment used in the course of doing business. There are three types of personal property: tangible, intangible and listed.
Tangible personal property includes physical objects such as vehicles, furniture and household goods, while intangible personal property includes things like stocks and bonds, as well as intellectual property such as patents and copyrights. Listed personal property is property that can be used for either business or personal purposes, such as a vehicle or computer that you use for work-related matters as well as personal matters.
One other thing that distinguishes personal property from real estate is that personal property involves riskier collateral. Stocks, bonds, and bank accounts fall under intangible personal property. Just as some loans—mortgages, for example—are secured by real property like a house, some loans are secured by personal property. A common example is car loans, where the vehicle serves as collateral for the loan. Personal property also comes into play when people insure their homes.
A homeowner's insurance policy typically covers not just the physical dwelling but also the owner's personal property, often referred to as the home's "contents. Homeowners policyholders can typically choose between two options for covering their personal property: replacement value or actual cash value. If the policy provides for replacement value, the insurer would be obligated to replace a destroyed item with a similar new item. With actual cash value, the insurer is only expected to pay what the item was worth, after taking depreciation into account.
So, for example, if a refrigerator were destroyed in a house fire, a homeowner with a year-old refrigerator and replacement coverage should receive enough money to buy a new refrigerator, while a homeowner with actual cost coverage would receive whatever the insurance company determined a used year-old refrigerator to be worth.
In the event that their personal property is destroyed, policyholders must file a claim with their insurance company, describing what they lost. For that reason, homeowners are well-advised to make an inventory of their personal property, ideally with photos and receipts, and store it safely off-premises, just in case it's ever needed.
Homeowners policies also limit coverage for certain types of personal property, such as jewelry and computers. Policyholders whose jewelry is worth more than that can pay extra to raise the limits in their policy or buy additional insurance, often called a floater , to cover its full value. Insurance Information Institute.
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