New CA Law Cuts UBER/Lyft Crash Coverage By 70%

On January 1, 2026, one of the most consequential changes to California rideshare law in a decade took effect with almost no public attention. Senate Bill 371, signed into law in late 2025, cut the uninsured and underinsured motorist coverage that Uber and Lyft must provide during a ride from $1,000,000 per accident down to $300,000 per accident, and it capped what any single injured person can recover at just $60,000. For roughly a decade, that million-dollar policy was the safety net that made rideshare travel one of the best-insured ways to get around California. That net has now been pulled away, and most riders have no idea.

To understand why this matters, it helps to understand what uninsured and underinsured motorist coverage (commonly called UM/UIM coverage) actually does. When another driver causes a crash and carries no insurance at all, or carries only the minimum limits the law requires, UM/UIM coverage steps into the shoes of the missing insurance and compensates the injured person for medical bills, lost earnings, and pain and suffering. California raised its minimum liability limits to $30,000 per person and $60,000 per accident beginning in 2025, but those figures remain far below the cost of a serious injury, and a meaningful share of California drivers still carry no insurance whatsoever. If an uninsured driver runs a red light and T-bones the Uber you are riding in, UM/UIM coverage is very likely the only meaningful source of recovery you have.

The new law did not appear out of nowhere. SB 371, authored by State Senator Christopher Cabaldon, was part of a broader legislative package negotiated among lawmakers, the rideshare companies, and labor groups, and it was paired with AB 1340, which gave drivers new organizing rights. Uber and Lyft argued that the $1,000,000 UM/UIM requirement inflated insurance costs and, in turn, the fares riders pay. Consumer advocates, including the Consumer Attorneys of California, opposed the change and warned that it protects billion-dollar corporations rather than the public. The companies won, and as of New Year’s Day the required coverage dropped by 70 percent.

Consider what $60,000 actually buys after a serious collision. A single ambulance ride and an emergency room evaluation with imaging can consume $10,000 to $20,000 before the injured person ever sees a specialist. One night in a hospital, a single outpatient spinal injection, or a few months of physical therapy can push the total well past the new per-person cap, and that is before a dollar is counted for lost wages or for the human losses (the pain, the sleepless nights, the activities given up) that California law recognizes as general damages. A rider who suffers a surgical injury, a brain injury, or any permanent impairment will exhaust $60,000 many times over. Under the old $1,000,000 policy, catastrophically injured riders had a realistic path to full compensation; under the new limits, many will not.

The cut falls on a specific group of victims: passengers and drivers who are struck by an uninsured motorist, an underinsured motorist, or a hit-and-run driver during a rideshare trip. When the rideshare driver personally causes the crash, the companies’ own liability coverage still applies. The people hurt by SB 371 are, in other words, the ones who did nothing wrong and had the misfortune of being hit by someone with little or no insurance, which describes a large share of the serious crashes we see in practice.

The good news is that Californians do not have to accept the new limits as the final word, because your own automobile policy can fill much of the gap. UM/UIM coverage purchased on your personal auto policy follows you when you are a passenger in someone else’s car, including an Uber or Lyft. Raising your own UM/UIM limits to $100,000, $250,000, or higher is typically one of the least expensive upgrades in the entire insurance market, and for households that can qualify, an umbrella policy with UM/UIM protection provides another layer still. Anyone who rides in rideshare vehicles regularly, and anyone whose family members do, should call their insurance agent this week and ask two questions: what are my UM/UIM limits, and what would it cost to raise them.

Rideshare drivers should take the change even more seriously. A driver who spends thirty or forty hours a week on the road is exposed to uninsured motorists constantly, and that driver’s recovery for a career-ending injury is now capped at $60,000 from the company policy. Drivers should ask their personal carriers about rideshare endorsements and should carry the highest UM/UIM limits they can reasonably afford, because the companies’ coverage will no longer carry the load it once did.

If you or a family member has been injured in a rideshare crash since January 1, 2026, the new law makes early legal guidance more important, not less. An experienced personal injury attorney will identify every policy that may apply (the at-fault driver’s liability coverage, the rideshare company’s coverage, your own UM/UIM policy, and any med-pay or umbrella coverage in the household) and will make sure claims are presented in the right order and within the strict deadlines California law imposes. The Legislature shrank the safety net, but with prompt and careful work, injured riders can still be made whole.