What you get for one payment
Protection for your purchase price against title problems that existed before you bought, plus the cost of defending your ownership in court. Searches reduce risk, but forgery, unknown heirs and recording errors can't always be found in advance.
What happens without it
You pay to defend any claim yourself and absorb the loss if it succeeds. The lender's policy won't help you: it only protects the bank.
When people consider skipping it
Cash buyers and buyers of inexpensive land are the most tempted, because no lender insists. They're also the ones with the most at stake if something goes wrong, since all of the money is theirs.
Common questions
Is title insurance a waste of money?
Claims are uncommon because the search catches most problems, but the ones that happen are costly. One payment covers the whole time you own the home.
Should I skip title insurance?
You can skip the owner's policy, but you can't add one later for the same purchase.