What is the difference between a home warranty and homeowners insurance?

Homeowners insurance protects the structure and your belongings from covered events like fire, theft, wind or hail damage. It also includes liability coverage if someone is injured on your property. A home warranty is a service contract that covers the repair or replacement of major systems and appliances that break down due to normal wear and tear, such as your HVAC, water heater, oven or garage door opener. Insurance covers sudden losses and is typically required by your lender. A warranty covers mechanical failures over time and is optional. Many buyers in Arizona negotiate for the seller to provide a home warranty as part of the purchase contract.