This article describes the impact of crediting and banks to the real estate insurance market in Latvia. It also describes the main developments of the last decade in the real estate market in Latvia. Stimulated by the rapid growth of mortgage lending market the real estate market developed very fast and resulted in a rapid growth of prices, which turned in to a price drop in 2007. In separate real estate market segments the price drop reached more than 70%. The formation and development of the real estate market affected the real estate insurance market as it is dependent on policies of crediting institutions. The article examines regularities and interactions between Latvia’s commercial bank policies and lending activities as well as activities of the real estate insurance companies and how they are affected by banks.