When you purchase a home, typically you will be given a choice to buy either a LENDER policy or a HOMEOWNER policy. The lender’s policy is attached to the mortgage so if you refinance, you will have to furnish them with another one. The Homeowner’s policy is attached to the property and as long as you own that home you will never need another one. In other words, if you purchased a homeowner’s title insurance policy when you bought the house, you do not have to buy a lender’s policy when you refinance.
My opinion, it is a necessary evil. Some claim it is a huge waste of money because the incidence of claim is so low and because there have been investigations into title insurance companies giving kickbacks to lenders. If you live in Iowa they have established their own title guarantee program, citing high costs. The difference in cost between a lender’s and homeowner policy is typically less than $100 and the total amount can be rolled into closing costs.
Not having it can cost you everything if you are one of the unlucky ones.