With the housing market in a slum, the value of homes has declined greatly. In areas where homes may be worth 500 thousand, they are now selling for 300 thousand or less. So if the value is decreasing, why are home owners still paying the same high insurance bills?

Insurance companies assess home owners insurance fees based on the cost to re-build that home if it were destroyed today. Therefore, the value of the home, as well as the cost of eliminating waste, and restoring the home to its original condition are all factored in. For these reasons, insurance prices are not changing with the slow housing market.

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