What California Riders Need to Know About New Uber and Lyft Insurance Laws

California’s rideshare insurance rules changed significantly on January 1, 2026, and most passengers have no idea. Senate Bill 371 (SB 371), authored by State Senator Christopher Cabaldon and signed by Governor Gavin Newsom in October 2025, restructured how Uber and Lyft must cover accident victims. Understanding the new California Uber laws could make a real difference if you are ever involved in a crash. 

What Is SB 371 and Why Does It Matter?

SB 371 emerged from negotiations between Governor Newsom, state legislators, rideshare companies, and labor unions as part of a broader legislative compromise. The bill was tied to Assembly Bill 1340, and the package was presented as a way to lower companies’ operational costs while keeping fares more affordable for everyday Californians.

Supporters argued that insurance premiums had ballooned out of control. Rideshare companies claimed that nearly half of each Los Angeles fare was going toward government-mandated insurance costs alone. By reducing those requirements, they argued, savings would be passed directly to consumers.

The Most Important Coverage Change: UM/UIM Protection

The single biggest shift under SB 371 involves uninsured and underinsured motorist (UM/UIM) coverage. This is the protection that kicks in when another driver, not the Uber or Lyft driver, causes an accident and lacks sufficient insurance.

Previously, California law required rideshare companies to carry $1 million in UM/UIM coverage per incident. Under SB 371, that figure has dropped to just $60,000 per person and $300,000 per accident. That is nearly a 70% reduction in the coverage available to injured passengers.

How Rideshare Coverage Works: The Three Periods

Period 1: Driver Is Logged In but Waiting

When a driver has the app on but has not yet accepted a ride, limited coverage applies. This includes $50,000 per person and $100,000 per accident for bodily injury, plus $30,000 for property damage. Some UM/UIM coverage is available if the at-fault driver is uninsured or if the driver’s personal insurance denies the claim.

Period 2: Driver Is En Route to Pick Up a Passenger

Once a driver accepts a ride and is on the way to pick up a passenger, coverage improves. The law now mandates a $200,000 excess coverage policy in addition to existing limits, along with a property damage increase to $30,000 per incident. These changes provide more protection for pedestrians, cyclists, and other motorists during this phase.

Period 3: Passenger Is Inside the Vehicle

This is where the most controversial change takes effect. When a passenger is actively being transported, Uber and Lyft still maintain $1 million in liability coverage if their driver is at fault. However, if another driver causes the accident, UM/UIM coverage is now capped at $60,000 per person and $300,000 per accident. That is a dramatic drop from the $1 million safety net that previously protected passengers in serious crashes.

Why the Reduced Coverage Is a Problem for Victims

Serious motor vehicle accidents routinely generate costs well above $60,000. A single hospitalization, emergency surgery, or extended rehabilitation program can easily exceed that limit on its own. Victims are then left to cover the remaining balance through personal health insurance, their own auto policy, or out-of-pocket funds.

California already ranks eighth in the nation for the highest uninsured driver rate. Approximately 1 in 8 drivers on California roads operate without insurance. Under the old rules, the $1 million UM/UIM requirement was specifically designed to protect passengers from this reality.

What This Means for the Future of Rideshare Legislation

The Consumer Attorneys of California (CAOC) is currently leading a coalition pushing counter-ballot measures for November 2026. Their proposed measures would add consumer safeguards, address medical billing practices, expand protections for sexual assault victims, and introduce broader regulations for the rideshare industry. This effort mirrors the $200 million campaign around Proposition 22 in 2020, which preserved independent contractor status for rideshare workers.

The legal landscape is shifting quickly, and future ballot outcomes could change the rules again before the end of the decade.

Steps to Take After a Rideshare Accident

Seek Medical Attention Right Away

Even if you feel fine after an accident, get examined by a doctor as soon as possible. Conditions like traumatic brain injuries, internal bleeding, and spinal damage may not show symptoms for hours or days after a crash. Early documentation also helps connect your injuries to the accident when you file a claim.

Preserve All Evidence from the Scene

Take photos and videos of the damage, road conditions, and any visible injuries. Screenshot your ride receipt and record the driver’s name and contact information. Thorough documentation is essential for establishing fault and supporting your claim.

Talk to an Attorney Before Accepting a Settlement

Initial settlement offers from insurance companies are often far lower than what victims are actually owed. Accepting an offer too early can waive your right to pursue additional compensation, even if your medical needs grow over time. An experienced personal injury law firm can advise clients to understand all available coverage options, including Period 3 excess policies and personal UM/UIM stacking, before agreeing to any terms.

How to Protect Yourself as a Rideshare Passenger

Given the reduced protections now in place, passengers who frequently use Uber or Lyft should take proactive steps. Review your personal auto insurance policy and check your UM/UIM coverage limits. If those limits are low, consider increasing them to create a secondary layer of protection.

Keeping detailed records after any accident, whether you are a passenger or another driver, will also position you better when navigating claims under the new California Uber laws.

The Bottom Line on SB 371

The new California Uber laws represent a significant shift in how accident victims are protected. The $1 million UM/UIM safety net that once covered passengers in serious crashes has been cut by nearly 70%, placing greater financial risk on individuals rather than billion-dollar corporations. 

Until ballot measures or future legislation restore stronger protections, knowing your rights and your coverage is more important than ever. For any concerns after an Uber or Lyft accident, consult an experienced rideshare accident attorney to protect your legal rights.