A homeowners insurance policy is something you buy from an insurance company. Whereas home warranty is a service contract by a warranty service provider.

Homeowners insurance covers the cost of losses arising from damage due to external forces like weather, fire, floods and earthquakes. It also covers damages caused by human factors like burglary, vandalism and arson. Your homeowners insurance will pay for repairs to the whole or a part of your home due to these factors, including costs related to replacing or rebuilding.

A home warranty, on the other hand, covers the cost of repair and replacement of major appliances and home systems like refrigerators, dishwashers, electrical systems, plumbing systems and so on. The precise coverage details in the case of both homeowners insurance and home warranty contracts depend on the type of plan and the extent of standard and optional coverage purchased by individual homeowners.