Home warranty insurance is insurance that is acquired by the builder and issued to the homeowner. This kind of insurance is used to protect them against loss due to non-completion, defects and breach of statutory warranties by the builder. This is needed because it motivates builders to do their work well and the consumer to trust the builders’ work. This is required by law and only effective if a builder becomes insolvent, disappears or dies before finishing the house or fixing defects in the house. This doesn’t cover contractual disputes or defective work by a builder who is in business.