This simple answer is to protect possibly the most important investment you'll ever make - the investment in your home. A lender goes to great lengths to minimize the risk in lending a borrower money needed to buy a home. First, the buyer's credit is checked as an indication of the ability of the borrower to pay back a loan. Then, the lender goes a step further. He or she makes sure that the quality of the title to the property a borrower is about to buy, and which the borrower will pledge as security for the loan, is satisfactory. The lender does this by obtaining a lender's policy of title insurance.
This policy only protects the lender's interest; it does not protect you! That's why you need an owner's title insurance policy, which can be issued at the same time as the lender's policy, from Texas National Title.