Title insurance protects your ownership in the real property. Title insurance guarantees that you have true entitlement to the property. Many lenders will require you to carry title insurance so they know for sure that you have clear ownership of the property and the home.
A title insurance company will conduct research before a loan is approved and they search for any outstanding liens, encumbrances or other defects that may hinder the property ownership from becoming solely yours. Once the Title Insurance company is sure that that property does not hold any such liens, the Title Insurance Company will issue title insurance. This protects the owner from anyone else trying to claim ownership of the property.