Most insurance covers a future period and is renewed. Title insurance is bought once, with a single payment at purchase, because the risks it addresses are already in existence when the policy is issued.
The risk is historical, not prospective
Title insurance covers defects in the chain of ownership: forged documents, undisclosed heirs, errors in public records, unreleased claims and boundary disputes.
Every one of those events happened before the purchase. What is uncertain is whether they will be discovered, not whether they will occur.
Because the underlying facts are fixed at the moment of purchase, the exposure does not grow with time, and there is nothing for an annual renewal to cover.
The search is the main protection
Before a policy is issued, the ownership record is examined for defects, and anything found is either resolved or excluded from cover.
The insurer's business model depends on that search preventing claims rather than on premiums exceeding them, which is unusual among insurance lines.
A large share of the premium therefore pays for the investigation rather than the risk transfer, which is why costs vary with the complexity of the record.
Two policies cover different parties
A lender's policy protects the lender's interest up to the loan amount and reduces as the loan is repaid. It does nothing for the owner.
An owner's policy covers the purchaser's own stake and typically continues for as long as they hold an interest in the property.
Buyers who assume the lender's policy protects them are the most common misunderstanding, and the two are frequently purchased in the same transaction.
What falls outside the cover
Defects listed as exceptions in the policy are excluded, which is why reading the schedule matters more than reading the general terms.
Issues arising after purchase, including claims created by the owner's own actions, are outside a policy that covers the state of title at the point of sale.
Physical problems with the building are not covered at all, since title insurance addresses the right to own rather than the condition of what is owned.
Why the product varies so much by country
Where a government maintains a guaranteed register of ownership, the state effectively provides the assurance and the private product is limited or unnecessary.
Where ownership rests on a chain of recorded documents that must be interpreted, the risk of defect is real and private cover developed to address it.
Practice, cost and whether the buyer or seller pays differ substantially between markets and change over time, so local convention governs the arrangement.