Most Californians have no idea a major shift in rideshare insurance is about to take effect. For years, passengers assumed that getting into an Uber or Lyft came with a strong layer of built-in protection if something went wrong. That assumption is about to change.
In late 2025, California lawmakers passed SB 371, a bill that significantly reduces the insurance coverage available to people injured while riding in a rideshare vehicle. The change becomes operative on January 1, 2026, and it affects every Uber and Lyft passenger on California roads.
What makes this change especially concerning is how quietly it happened. There were no widespread consumer warnings, no major public education campaigns, and very little mainstream coverage explaining what riders stand to lose. Yet the consequences for injured passengers can be severe.
The Coverage Drop: From $1 Million to $60,000
For many years, California required Uber and Lyft to carry up to $1 million in Uninsured and Underinsured Motorist (UM/UIM) coverage whenever a passenger was in the vehicle. This coverage applies when another driver causes the crash and either has no insurance, insufficient insurance, or flees the scene.
That $1 million policy served as a crucial safety net. In serious injury cases—traumatic brain injuries, spinal injuries, multiple fractures, or permanent disability—medical bills alone can easily exceed six figures. The rideshare UM/UIM coverage often made the difference between full compensation and a financially devastating shortfall.
SB 371 dramatically changes that landscape.
Under the new law, the required UM/UIM coverage drops to:
- $60,000 per person
- $300,000 per incident
This represents roughly a 94% reduction in available protection for individual passengers. Someone who would previously have had access to a $1 million policy may now be capped at $60,000 unless they have substantial UM/UIM coverage of their own.
In real-world terms, that amount may barely cover emergency room care, let alone surgery, rehabilitation, lost income, and long-term medical needs.
Understanding UM/UIM Coverage in Rideshare Cases
UM/UIM coverage exists to protect injured people when the at-fault driver cannot fully pay for the harm they caused. This is especially important in California, where uninsured drivers and hit-and-run crashes are common.
In rideshare cases, UM/UIM coverage often becomes the primary source of recovery when:
- The at-fault driver has no insurance
- The at-fault driver carries only minimum policy limits
- The at-fault driver flees the scene and is never identified
Before SB 371, Uber and Lyft passengers benefited from unusually strong protections compared to most personal auto policies. That protection is now being scaled back to levels closer to minimum statutory requirements.
When the New Law Applies
Timing is critical when evaluating rideshare injury claims.
SB 371 becomes operative on January 1, 2026. Importantly, nothing in the statutory text suggests that the law applies retroactively. Under long-standing California principles, insurance coverage is governed by the law in effect on the date of the collision.
This distinction can determine whether an injured passenger has access to a seven-figure policy or a fraction of that amount.
Accidents Before January 1, 2026
For crashes that occur before January 1, 2026, the existing $1 million UM/UIM coverage should still apply. This remains true even if:
- The claim is made after January 1, 2026
- Litigation is filed after the law takes effect
- Settlement negotiations continue into 2026 or beyond
For injured passengers, this timing can dramatically affect case value and long-term financial recovery. For attorneys, it underscores the importance of identifying the exact date of loss and preserving coverage arguments early.
Accidents On or After January 1, 2026
For collisions that occur on or after January 1, 2026, the new lower coverage limits apply:
- $60,000 per person
- $300,000 per incident
In multi-passenger crashes, the per-incident cap can further reduce what each injured person ultimately receives. Multiple seriously injured passengers may be forced to divide a limited pool of coverage.
This shift will fundamentally change how rideshare injury cases are evaluated, negotiated, and litigated.
Why This Change Matters for Passengers
Uninsured and underinsured drivers are not rare in California—they are a daily reality. Hit-and-run crashes are equally common, particularly in urban areas.
Until now, Uber and Lyft passengers had meaningful protection even when the at-fault driver could not be identified or lacked adequate insurance. That protection helped ensure access to medical care, rehabilitation, and compensation for lost income.
Starting in 2026, many passengers will discover—often too late—that the safety net they assumed existed is far smaller than expected.
The practical effect is a transfer of risk. Instead of large rideshare companies absorbing the financial exposure, individual passengers are left to rely on their own insurance or personal assets.
The Impact on Drivers and Households
This change does not affect passengers alone. Rideshare drivers may also face increased exposure in complex coverage disputes, and households may find themselves navigating overlapping insurance policies after a crash.
Families already dealing with serious injuries may be forced to confront coverage gaps, liens, and difficult financial decisions that were less common under the prior system.
What Passengers and Drivers Should Do Now
There are practical steps Californians can take before the new law takes effect:
- Review your personal auto insurance policy, focusing on UM/UIM limits. Many drivers carry only minimum coverage without realizing how often UM/UIM applies.
- Consider increasing your UM/UIM limits if you frequently use rideshare services.
- After any Uber or Lyft crash, document the date carefully and seek legal guidance early. Coverage availability may depend entirely on when the collision occurred.
For crashes that occurred before January 1, 2026, acting promptly can help preserve access to higher coverage limits.
Final Takeaway
SB 371 represents one of the most significant rollbacks of consumer protection in California rideshare history. Most passengers will not realize their coverage has been reduced until they are already injured and facing mounting medical bills.
If you or someone you know was hurt in an Uber or Lyft crash—especially one involving an uninsured or hit-and-run driver—understanding which insurance rules apply could fundamentally change the outcome of the case.