A new bill in California changes the insurance requirements that apply to rideshare companies such as Uber and Lyft, requiring them to carry substantially less in uninsured and underinsured motorist (UM/UIM) coverage. This new rule passes greater financial risks to drivers and passengers who are hurt in rideshare collisions involving underinsured motorists. If you’ve been injured, speaking with an Orange County Uber accident lawyer or an Orange County Lyft accident lawyer can help you understand your options under these new rules.
What Are the New Insurance Rules for Rideshare Companies Under SB 371?
California Senate Bill 371, signed into law in October 2025, makes changes to the existing rules surrounding mandatory insurance coverage for transportation network companies (TNCs), also known as rideshare companies. It significantly reduces coverage requirements in terms of uninsured and underinsured motorist insurance. Previously, California law required TNCs such as Uber and Lyft to carry at least $1 million in liability insurance per person and $1 million per accident for bodily injuries caused by uninsured and underinsured motorists. Now, the required amounts have dropped to $60,000 for one person and $300,000 for two or more persons.
Additional Changes to California’s Rideshare Laws
The insurance reforms of SB 371 are connected to AB 1340, which is expected to take effect in 2026. This law will allow drivers who work for TNCs to unionize, aiming to improve their wages and working conditions. Under AB 1340, gig economy workers will be allowed to participate in a statewide bargaining system that addresses issues such as driver safety and wages while still maintaining their status as independent contractors.
About Uninsured/Underinsured Motorist Insurance in California
In California, all motorists are required by law to carry at least $30,000 per person and $60,000 per accident in liability insurance for bodily injury or death, plus another $15,000 for property damage. Commercial vehicles, such as large trucks, must carry greater amounts of coverage since they pose a greater risk of harm to others.
Unfortunately, many drivers are guilty of illegally driving without automobile insurance, or not carrying enough insurance. For this reason, UM and UIM insurance is recommended, though not required, for the average motorist. UM/UIM insurance offer first-party coverage to injured accident victims in situations where the at-fault driver does not have enough insurance to fully cover the damage caused.
How Could SB 371 Affect Your Rideshare Accident Claim in California?
California’s previous TNC law offered more generous coverage – available through the rideshare company’s insurance policy – to injured drivers and rideshare passengers in the event of collisions involving uninsured and underinsured drivers. After the passing of SB 371, however, there may not be enough coverage to pay for a victim’s losses through Lyft or Uber alone. If there are many injured passengers, or the nature of an injury is severe, the $300,000 per accident available in UM/UIM coverage may not fully cover medical expenses. This points to a greater reliance on drivers’ personal insurance policies for injury coverage than before.
Note, however, that rideshare companies are still required to carry $1 million in general bodily injury liability coverage. If you get injured in a rideshare car accident in California, the new law means that TNCs must act first to provide primary insurance for coverage. They can no longer delay claims to search for personal coverage. However, the UM/UIM coverage available has been reduced, which can raise concerns for injured rideshare passengers. If you wish to maximize your financial recovery after a severe rideshare accident in California, contact an attorney at Bridgford, Gleason & Artinian for a free discussion about your legal rights and options.