This appeal presents a question of tax lien priority. The Gerharts owned a commercial building in Mingo, mortgaged to Mingo Trust & Savings Bank and insured under two policies by Iowa Fair Plan. As a result of three assessments for taxes owed by Charles Gerhart, the last on July 5,1973, the State of Iowa held a $3,975.26 lien against the building. Based on an assessment of August 15, 1973, the United States held a $8804.97 lien against it. The building was destroyed by fire on August 21, 1973. Each government claimed priority over the other in the fire insurance proceeds. Iowa Fair Plan brought an inter-pleader action against all claimants to the fund. Each government moved for summary judgment on the issue of lien priority. The trial court sustained the priority of the lien of the State of Iowa in the interpleaded fund and entered summary judgment accordingly. The United States appealed. We reverse.
The liens arose under similar statutes. The federal lien is based on 26 U.S.C. § 6321 which provides:
If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount * * * shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.
The state lien is based on § 422.26, The Code, 1973, which provides in part:
Whenever any taxpayer liable to pay a tax and/or penalty imposed refuses or neglects to pay the same, the amount * * * shall be a lien in favor of the state upon all property and rights to property, whether real or personal, belonging to said taxpayer.
Thus the federal and state tax lien statutes each provide for liens “upon all property and rights to property, whether real or personal, belonging to * * * [the taxpayer].”
State law determines whether and to what extent the taxpayer has “property” or “rights to property” to which these liens attach. However, once a federal tax lien has attached to a taxpayer’s state-created property interests, the question of priority of competing liens is determined by federal law. The effect of 26 U.S.C. § 6321 is to attach federally defined consequences to rights which exist under state law. United States v. Durham Lumber Company, 363 U.S. 522, 80 S.Ct. 1282, 4 L.Ed.2d 1371 *629(1960); Aquilino v. United States, 363 U.S. 509, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960); United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135 (1958).
One federally defined consequence is that a state lien is subordinate to a federal tax lien on specific property unless it became choate before the federal tax lien. Choateness is determined under federal law. United States v. Pioneer American Ins. Co., 374 U.S. 84, 83 S.Ct. 1651, 10 L.Ed.2d 770 (1963); Fore v. United States, 339 F.2d 70 (5 Cir. 1964), cert. denied, 381 U.S. 912, 85 S.Ct. 1532, 14 L.Ed.2d 433 (1965). To be choate a lien must be certain as to amount, identity of the lienor, and the property subject to the lien. United States v. City of New Britain, 347 U.S. 81, 74 S.Ct. 367, 98 L.Ed. 520 (1954). Although a taxpayer’s property may be born with a tax lien on it, it is necessary that the property right exist before the lien attaches to it. Wolverine Ins. Co. v. Phillips, 165 F.Supp. 335, 353 (N.D.Iowa 1958), appeal dismissed, 283 F.2d 518 (8 Cir. 1960). Because of this, a lien may be choate as to property of the taxpayer which is in existence, but it is inchoate as to property rights which have not yet arisen. United States v. L. R. Foy Construction Co., 300 F.2d 207 (10 Cir. 1962).
In the present case the state tax lien attached to property interests of Charles Gerhart prior to and on July 5, 1973. The federal tax lien attached to his property on August 15, 1973. The Gerhart building was standing on those dates. Thus, as to it, the state’s lien was prior in time and therefore first in right. United States v. Vermont, 377 U.S. 351, 84 S.Ct. 1267, 12 L.Ed.2d 370 (1964). The Gerharts also had their fire coverage with Iowa Fair Plan on the dates the liens were filed. However, the liens did not attach to the fire insurance policies because a fire insurance policy is not “property” or a “right to property” within the meaning of either lien statute. Under Iowa law it is simply a contract for indemnity. McWilliams v. Farm and City Mutual Ins. Assn., 248 Iowa 233, 80 N.W.2d 320 (1957). It does not have a cash surrender value. Cf. United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135 (1958). No value can be realized from it until the contingency making its proceeds available occurs.
If the contingency does occur, the insured immediately acquires a property interest in the insurance proceeds which is separate and distinct from the insured premises and the policy. Pre-existing tax liens attach immediately to the new property. This principle was explained and applied in Home Insurance Company v. B. B. Rider Corporation, 212 F.Supp. 457, 462 (D.N.J.1963):
* * * Where it is entirely uncertain whether the conditional promise to pay will ever become unqualified and enforceable, the interest of a party to the contract is purely contingent, and therefore not “property and rights to property” to which a tax lien under § 6321 could attach. [citations] Until the fire occurred no lien could arise in favor either of the government or of any other claimant upon the interest, whatever it was, of the taxpayer in either of the fire insurance policies.
* * * The moment the fire occurred, the agreement to indemnify embodied in the policies ripened into a chose in action in favor of the insured, which constituted “property or right to property” to which the previously inchoate tax lien immediately attached.
See also Randall v. Colby, 190 F.Supp. 319, 326-327 (N.D.Iowa 1961); Continental Finance, Inc. v. Cambridge Lee Metal Co., 100 N.J.Super. 327, 241 A.2d 853 (1968), affirmed 105 N.J.Super. 406, 252 A.2d 417 (1969), affirmed 56 N.J. 148, 265 A.2d 536 (1970).
Both liens had attached to Charles Gerhart’s property before the Gerhart building was destroyed by fire on August 21, 1973. The Gerharts’ interest in the insurance proceeds came into being at that time. Therefore the liens attached simultaneously to those proceeds. The liens became choate in the new property interest at *630the same time. Because the state lien did not become choate before the federal lien, the federal lien has priority in the inter-pleaded fund. The trial court erred in holding otherwise.
REVERSED.
MASON, RAWLINGS, LeGRAND and REYNOLDSON, JJ., concur. REES, J., MOORE, C. J., and UHLEN-HOPP and HARRIS, JJ., dissent.