Ответ:

  1. I was walking home when I saw an accident.
  2. While we were waiting for the bus, it began to snow.
  3. He broke his leg while he was skiing.
  4. They were having a picnic when it started to rain.
  5. I met an old friend while I was shopping in town.

Past continuous gives the background action; past simple marks the event that happened during it.