Title insurance is meant to protect the equity you have in your property. There are two types of policies: an owner’s title policy and a lender’s title policy
Let’s say that you build your house in a subdivision and the attorney goes back and searches the title for 50 years and everything comes back fine. Then one day someone shows up and says that the subdivision was his grandfather’s land 75 years ago, and that he has been living in Europe and now all these houses (including yours) are built on his land.
A lender’s title policy will protect you so you don’t have to pay back that loan in the event that something like this happens. This insurance protects the lender’s investment in the property.
An owner’s title policy is the only thing that you have to protect the equity in your house. If you are putting very little money down, it may not be necessary to get an owner’s title policy, but if you are putting a lot of money down, it may be a good idea to have one. If you have an owner’s policy, you are always protected, no matter how many times you refinance. A lender’s policy has to be re-done every time you get a new lender.