When wildfires devastated Pacific Palisades in early January, many of the houses destroyed were not covered by private insurance due to California's Proposition 103, which gave the state the power to aggressively limit homeowners insurance rates. Insurers, in turn, have limited which properties they will cover or have exited the state entirely. Many of the rebuilding costs will fall on a state-run backup insurance system, but analysts believe it could be overwhelmed by billions of dollars in damage, potentially putting taxpayers on the hook.
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