Last week I wrote about the devastation from the two back-to-back hurricanes hitting Florida.

The massive damage needed to be repaired, and some companies would benefit more than others.

One company I mentioned really struck a nerve… Everest Group (EG), the reinsurance Company.

A ton of people were confused.

How is it that insurance companies could be a good investment when these massive natural disasters are destroying billions in property?

It’s a great question, and a relatively simple one.

First a quick story to explain WHY insurance is great to invest in right now… Then I’ll share a few top insurance companies to look at adding to your portfolio.

I bought a cabin.

Yep, a few months back, we found a place up north, in the mountains. It was perfect. The cabin needed some repairs, but it had a fenced area for the dogs, was relatively easy to get to… and had pine trees everywhere.

Sitting on the back patio sipping coffee is a dream come true, at the cabin.

But it almost didn’t happen.

We went into escrow and I called my Insurance guy (who I’ve been with for almost 2 decades).

After two days of silence he called me back… “I’m Sorry.” he said. “None of the companies I work with are writing insurance in that area. As a matter of fact, one of my largest insurance companies just stopped all policies in your zip code!”

I was stunned.

No problem. I called another broker. Same response. I called my Dad - he has a cabin in the same area, what insurance company did he use?

I contacted them… they’re not writing new policies in the area.

In total I contacted 8 insurance companies and insurance brokers, and we finally found ONE company to write insurance on the cabin.

My insurance was 400% more than I expected.

Funny thing (Ok not funny - tragic really)… the price I pay for insurance on the cabin is DOUBLE the price I pay back at home. Despite the value of the cabin being HALF the house.

Yep, my new insurance bill was 400% higher than what I normally pay.

Think about that… I’m paying twice the price for half the coverage.

By the way, this is happening all over the United States.

Here was some news from California:

“State Farm will discontinue coverage for 72,000 houses and apartments in California starting this summer, the insurance giant said this week, nine months after announcing it would not issue new home policies in the state.”

Full Story Here.

And one on North Carolina:

“With many western North Carolina residents still lacking power and running water from Hurricane Helene, a hearing began Monday on the insurance industry’s request to raise homeowner premium rates statewide by more than 42% on average.”

Full Story Here.

There are hundreds of stories just like these two. I saw stories about Farmers seeing rates increase… and Churches too. I’ve seen articles about insurers dropping coverage entirely in certain areas.

Think about the ripple effect this will have.

If you can’t get insurance on your house, you can’t get a mortgage. We could see entire sections of the country abandoned because of an inability to get insurance.

But that’s a worst case scenario.

What’s going to happen is insurance rates will simply skyrocket. They already are.

Every chance insurance companies have to increase rates, they will. They’re not a charity after all… they need to make money. So, rates will go up… protecting corporate profits.

And that’s why I think insurance companies will be even more profitable 5 and 10 years from now.

Think about it… when a major company like State Farm exits an area (like California), they leave a vacuum for smaller insurance companies to rush in and offer coverage - at Premium prices of course.

Look, long term the people running insurance companies will make money, and that will be good for shareholders.

Top Insurance Companies to Buy?

Remember, do your own diligence, but there’s a few stocks that you should take a look at:

=> Chubb Limited (CB) - A Warren Buffet Favorite

=> The Progressive Corporation (PGR)

=> The Allstate Corporation (ALL)

=> The Travelers Companies, Inc. (TRV)

And if you don’t want to spend time researching companies and trying to pick the best ones… consider an ETF like: SPDR S&P Insurance ETF (KIE)

The ETF is up 33% in just the last year!

Are You Having Insurance Coverage Issues?

Tell me, have you had problems getting insurance on your home or business?

I’m collecting stories for a future article, so Reply back and let me know what happened and what company you ended up doing business with!