You use it any time you need to use the active verb "to have" in the past perfect tense. "to have" is an active verb e.g. I had a drink [simple past] and also an auxiliary verb e.g. I had drunk a pint of beer when my friend arrived at the pub In my context, we can replace the verb "to drink" with "to have" and the meaning stays the same. So we can say e.g. I had had a pint of beer when my friend arrived at the pub.

If I had had more money, I would have bought a palace and a Ferrari. But I didn't have the money.... so no palace and no Ferrari. You need 'had had' in 3rd conditionals where the main verb is 'have' and in any sentence where, as Michaels explains, you need the past perfect of have.