Title insurance is a protection for residential and commercial Real Estate. There are two types of Title insurance, Lender's Title Insurance and Owner's Title Insurance. Virtually all lenders require a Lender's Title Policy to get a loan on a property whether it be for the original purchase loan or for refinancing. Every property has a history and has had previous owners.
Title insurance is a way to protect your investment from claims against your property from people who have had previous interests in the property. The Title Company will do a Title Search to check to see if there is a problem with the Title (problems are commonly known as "Clouds on the Title"). One out of every four properties has some sort of problem with the title that is fixed prior to the insurance being issued. Occasionaly, there are hidden problems that can be caused by forgery, fraud, error on the public records or unknown heirs or wills. The Title policy would be the only protection for your investment.
A Title policy has a one time payment, rather than the recurring annual payment that you have with homeowner's or flood insurance. The policy will be paid for at the time of closing on the property and/or loan. The policy will cover the property for as long as you own it. Remember, the Title policy only protects ownership issues it does NOT protect against fire or theft. That is why you also need to get homeowner's and possibly flood insurance.