Effective January 1, 2026, there has been a remarkable change in Uber’s insurance coverage for riders and drivers under California’s SB 371 law. The law has reduced the minimum Uninsured/Underinsured Motorist coverage that rideshare carriers, such as Uber, must provide to riders. If you are involved in a car accident while riding in or driving for Uber, the coverage available under the new law is significantly reduced, which can substantially limit what you can recover from an uninsured or underinsured driver. A reduced amount has been the result of legislation created by compromise with the aim of making transportation more accessible; this, in turn, has created anxiety for those who support safety and those who have been injured in accidents.
If you have recently found yourself injured from a rideshare accident at the hands of either Lyft or Uber, understanding the changes in SB 371 is crucial to protecting your rights. At KAASS LAW, we help clients navigate these evolving rules to secure the compensation they deserve. Contact KAASS LAW for a free consultation if you have been affected.
What Exactly Changed with California's SB 371?
California's SB 371, signed into law late in 2025 and effective as of January 1, 2026, modifies the state's Public Utilities Code to change the amount of insurance coverage applicable to Transportation Network Companies (TNCs) like Uber and Lyft. The most significant modification concerns Uninsured/Underinsured Motorist coverage during the "on-trip" stage, when the passenger is in the vehicle.
Previously, rideshare companies had to maintain $1 million in UM/UIM coverage per person (and per accident) in case a crash was caused by an uninsured or underinsured motorist. This would provide victims with a reasonable safety net to cover medical bills, lost wages, and pain and suffering in the event the at-fault party could not pay their damages.
Under the new rules from SB 371, changes include:
- The UM/UIM coverage per person has been decreased to $60,000.
- The per-accident limit has been reduced to $300,000.
This means that there will be a nearly 94% reduction in personal protection. For serious injuries such as spinal injuries, brain injuries, and multiple fractures, medical bills may exceed $60,000. This may require the victim to rely on their own medical insurance and auto insurance for reimbursement.
This law transfers the responsibility for UM/UIM coverage to the TNC (Uber or Lyft) itself, thereby simplifying the compliance process but, in turn, diminishing the layer of protection.
Understanding Rideshare Insurance Periods in 2026
Rideshare insurance operates in distinct "periods" depending on app status and passenger presence. SB 371 maintains the tiered system while modifying UM/UIM specifically:
Period 1 – App on, no ride accepted:
Liability limits are lower and generally mirror standard auto liability policies, such as $50,000/$100,000 for bodily injury. UM/UIM coverage during this period is limited or may not apply.
Period 2 – On the way to pick up a passenger:
A $200,000 excess liability policy applies to protect third parties, such as pedestrians or other motorists, if the rideshare driver causes an accident.
Period 3 – Passenger in the vehicle:
This period is most directly impacted by SB 371. While liability coverage remains at $1 million, UM/UIM coverage is capped at $60,000 per person and $300,000 per accident if the at-fault driver is uninsured or underinsured.
Gaps can still persist for drivers, particularly those injured without a passenger (Periods 1 or 2), for which personal auto policies or occupational accident coverage under Prop 22 may apply, often with lower limits.
These distinctions matter because many accidents involve uninsured drivers. California estimates it at about 17% of motorists without coverage. Recovery of full damages becomes harder with lower UM/UIM caps.
Why Did This Change Happen? The Compromise Behind SB 371
The enactment of California's SB 371 followed a “landmark compromise” among Governor Newsom, state lawmakers, rideshare companies, and labor groups. Paired with AB 1340, which gives drivers collective bargaining rights while keeping them independent contractors, the law sought to bring affordability.
Proponents said the previous $1 million UM/UIM requirement represented an "outdated hidden cost" not levied against taxis, buses, or privately owned vehicles. This artificially raised fares and cut into the drivers’ take-home pay. By bringing the UM/UIM requirement closer to standard auto insurance levels, which most personal policies provide at much lower limits or none at all, the rule change aims to reduce riders’ costs and increase drivers’ take-home pay.
Critics, whether they are injury attorneys or consumer advocates, fear the limit transfers financial risk from companies to individuals: that is, to perhaps the most vulnerable passengers who use the rides to get to work, doctor appointments, or other everyday functions.
How These Changes Affect Injured Riders and Drivers
Injured riders (passengers): In the event that the accident was caused by the negligence of another motorist, and that motorist is uninsured, Uber's UM/UIM coverage is limited to a maximum of $60,000 for bodily injury. In most cases, damages for bodily injury might go beyond this, and you would have to rely on your own underinsured motorist coverage.
Injured drivers: Protection depends on time. Occupational Accident Coverage (OAC) protection is available to injured drivers while on the job, independent of fault, but insurance cuts reduce support if struck by an uninsured driver while alone on a passenger pickup errand. Most drivers carry very limited personal insurance, making the risk greater.
In either scenario, a layered insurance program (TNC policy, personal policy, and health insurance) is complex to coordinate to optimize recovery.
What Should You Do If Injured in a Rideshare Accident in 2026?
- Seek immediate medical care and document everything—photos, police reports, witness info.
- Report the incident to Uber/Lyft via the app.
- Avoid early settlements. Insurance adjusters may offer quick, low amounts under the new caps.
- Consult a personal injury attorney experienced in rideshare claims to identify all available coverage sources.
At KAASS LAW, our team specializes in motor vehicle accidents involving Uber and Lyft. We fight to hold companies accountable and recover full compensation, even under these tightened rules.
How KAASS LAW Fights for You Amid SB 371 Changes to Uber Insurance Coverage
The SB 371 amendments usher in a new era for Uber insurance coverage and rideshare safety in California. Although intended to make insurance relatively affordable, the drastically reduced Uninsured/Underinsured Motorist (UM/UIM) coverage requires victims to take matters into their own hands. Do not assume that you still have access to the former $1 million protection.
If you or a loved one has been wounded in an Uber accident after January 1, 2026, contact KAASS LAW today. We will review your case free of charge. We are here to ensure you receive the fair justice available under the law in this new legal landscape.