California’s New Ride Share Insurance Law Shifts Risk From Uber to Passengers

California’s SB371: A Win for Uber, A Loss for Injured Passengers

The law in California has recently changed to allow Uber, Lyft, and other rideshare service companies to reduce the amount of uninsured and underinsured motorist coverage from $1 million to $60,000 per person. This permits a 94% reduction in coverage. This change significantly undermines the protection that ensured injured victims could recover the true cost of their losses. In many cases, medical bills alone can exceed $60,000, meaning victims may now be forced to rely upon their own health or auto insurance, or worse, face financial ruin.

This new legislation is intended to make rideshare services cheaper and hailed as a “landmark compromise” mark one of the most significant rollbacks in insurance protection for Uber and Lyft riders to date. The law quietly dismantles one of California’s most important consumer protections: the $1 million safety net that has long shielded passengers, drivers, and pedestrians injured in rideshare accidents.

What SB371 Claims to Fix:

At first glance, SB 371 sounds like progress. The bill was part of a broader agreement tied to collective bargaining rights for app-based drivers — a deal that Governor Newsom described as “a historic compromise between workers and business.” The message was simple: lower costs, more rights, better balance. But in practice, it’s something else entirely.

By lowering uninsured and underinsured motorist coverage from $1 million to $60,000 per person, SB 371 doesn’t just adjust a number, it changes who carries the burden when disaster strikes.

If a rideshare passenger or driver is hit by someone without insurance, the coverage that once fully protected them may now run out before the last hospital bill is paid. Victims could be left to depend on their own auto policy, or in too many cases, nothing at all.

This law shifts the risk away from billion-dollar companies and places it squarely on the people who use their services. It’s a quiet change with loud consequences.

The Real Cost Behind “Affordability”

It is important to note that every policy has a price tag; but what SB 371 does is shift who pays it.

Uber and Lyft will save millions in reduced insurance premiums each year. For them, “affordability” means lower operating costs and higher margins. For passengers and drivers, it means taking on risks that used to be covered.

As we might know, when an accident happens, medical bills can climb fast. A trip to the ER, diagnostic scans, or surgery can easily cross $50,000–$100,000 before rehabilitation even begins. Under the new coverage, that protection can vanish before recovery truly starts. And once the policy limit is hit, the responsibility doesn’t disappear — it shifts.

These bills shift to the injured passenger, the underinsured driver, and eventually to taxpayers through unpaid medical bills and emergency services.

So yes — rides might be a few dollars cheaper. But the real cost shows up in the devastating moments that follow an accident. The moment when someone realizes the coverage, they thought they had isn’t there anymore, and now what?

From a distance, insurance laws look like numbers — dollar limits, policy caps, coverage tiers. But up close, these laws are the boundary between rebuilding a life and drowning in medical debt.

At our firm, we have worked with clients whose lives have been turned upside down in a matter of seconds. In those moments, the only thing standing between an injured person and financial ruin is the coverage available.

When that coverage shrinks, so do their chances of recovery.

SB 371 isn’t just a policy adjustment; it’s a shift in responsibility. It moves the weight of an accident — the real, physical, emotional, financial weight — off the companies that profit from the rides and onto the people who take them.

And the truth is, most Californians won’t notice this change until it affects them. Until a loved one gets injured in a rideshare accident. Until an adjuster says, “I’m sorry, that’s the policy limit.” Until they realize that the protection they assumed was there, quietly disappeared in the fine print.

For Uber and Lyft, this may be a victory in cost-saving.

For everyone else, it’s a warning: the law just made it easier for corporations to protect their profits and harder for people to protect their lives.

So yes, rides might be a few dollars cheaper. But the cost of that “savings” might one day be measured in something far more expensive — justice.

What You Can Do

Get your voices heard. Reach out to your representatives and show opposition to this legislation as you should always do!

In addition, you can obtain your own UM coverage through your personal auto policy, but it is important to make sure your limits are adequate. We, at Heimanson and Wolf, are happy to discuss it with you further and help you locate a trusted and reliable insurance agent. Call us at (310) 446-1522 or reach out via our social media @heimansonwolf.

Works Cited:

Governor Newsom Press Release (Aug 29 2025)

Uber Newsroom – California Insurance Reform (2025)

Taheripour Law Blog – New California Law Could Limit Uber and Lyft Liability (2025)