What is California Senate Bill 371?
SB 371 is a piece of legislation signed in late 2025 that drastically reduces the mandatory Uninsured/Underinsured Motorist (UM/UIM) coverage Uber and Lyft must provide—dropping it from $1 million down to just $60,000 per person starting in 2026.
For years, California passengers operated under a “safety net.” If you were in an Uber that got hit by an uninsured driver, or if you were a victim of a hit-and-run while in a rideshare vehicle, the rideshare company (Uber or Lyft) provided a $1 million insurance policy to cover your damages. This ensured that even catastrophic injuries—like spinal damage or traumatic brain injuries—were covered.
SB 371 changes the game entirely.
The “Grand Compromise”
To understand why your settlement potential has shrunk, you have to look at the political trade-off behind the bill. SB 371 was part of a “grand compromise” between labor unions, state legislators, and the rideshare giants.
- The Win for Drivers: The bill was packaged with AB 1340, which granted rideshare drivers the right to unionize and collectively bargain.
- The Win for Uber/Lyft: In exchange for allowing unions, the companies successfully lobbied to slash their insurance overhead. They argued that the $1 million policy was “excessive” compared to taxis and regular drivers.
- The Loss for Passengers: The cost savings for Uber come directly from the insurance pool available to pay for your medical bills and pain and suffering.
Key Changes at a Glance
This new California rideshare law creates a tiered system that feels much more like standard personal auto insurance than the commercial-grade protection passengers are used to.
| Feature | Old Law (Pre-SB 371) | New Law (SB 371) |
| UM/UIM Limit (Per Person) | $1,000,000 | $60,000 |
| UM/UIM Limit (Per Accident) | $1,000,000 | $300,000 |
| Primary Responsibility | Rideshare Co. | Rideshare Co. (Explicitly Primary) |
According to the text of the bill, the intent is to “reinvest savings to enhance economic stability,” but for a personal injury claim, this creates a massive gap. If your hospital bill is $80,000 and the new limit is $60,000, you are potentially personally liable for the remaining $20,000 unless you have a skilled Uber/Lyft accident attorney to find other pockets of coverage.
Does Uber cover my medical bills if the other driver has no insurance?
Yes, Uber and Lyft will still cover your bills, but only up to the new $60,000 cap; if your injuries exceed this amount, you must rely on your own health insurance or personal auto policy to pay the difference.
This is the specific “Job” most victims need done: Risk Mitigation. You aren’t just worried about the crash; you are worried about bankruptcy.
The Problem with Uninsured Motorists in California
California has one of the highest rates of uninsured drivers in the country. In many rear end collisions or intersection crashes, the person who hits your Uber driver often has:
- No Insurance: They are driving illegally.
- State Minimum Insurance: They only carry $15,000 in liability coverage (or $30,000 under newer general auto laws).
In the past, this didn’t matter. Your rideshare accident lawyer would simply file a claim against Uber’s $1 million UIM policy. Now, that safety net is gone.
The “Scenario” Analysis
Let’s look at a hypothetical scenario to demonstrate how this affects your maximum compensation.
The Crash: You are a passenger in a Lyft. A drunk driver runs a red light and T-bones your vehicle. You suffer a broken leg and a concussion. The drunk driver has no insurance.
- Medical Expenses: $55,000 (Surgery, ER visit, Rehab)
- Lost Wages: $10,000 (You missed 6 weeks of work)
- Pain and Suffering: $40,000 (Standard multiplier for trauma)
- Total Claim Value: $105,000
The Outcome Under SB 371:
Since the at-fault driver is uninsured, you turn to Lyft’s UIM policy.
- The Cap: Lyft is only required to pay $60,000.
- The Shortfall: Your claim is worth $105,000, but you only receive $60,000. You are left with a $45,000 deficit.
What Happens Next?
This is where having a legal team becomes non-negotiable. An experienced personal injury firm will look for “stacking” opportunities or secondary liability:
- Your Own UIM Policy: If you have personal car insurance with high UIM limits, your lawyer may be able to tap into that policy after the Uber policy is exhausted.
- Third-Party Liability: Was the road design faulty? Was the Uber driver partially at fault? (If the Uber driver is even 1% at fault, you might access their liability policy, which is distinct from the UIM policy).
Expert Note: “According to insurance data, 1 in 8 drivers is uninsured. The reduction of UIM coverage to $60,000 means that for serious personal injury cases, the rideshare policy will be exhausted almost immediately.”
The difference between “Period 2” and “Period 3” coverage under new 2025 laws
“Period 2” is when a driver has accepted a ride but hasn’t picked you up yet, while “Period 3” is when you are physically in the car; SB 371 introduces a new $200,000 excess policy for Period 2, creating a complex “coverage gap” that varies by the minute.
Understanding these periods is critical because the statute of limitations and the insurance limits change the second the driver taps “Arrived” on their app.
Period 1: The “App On” Phase
- Status: The driver has the Uber/Lyft app on and is waiting for a request. They have no passenger.
- Coverage: This is the “danger zone.” Rideshare companies typically provide very low liability limits (often 50/100/30).
- 2025 Impact: If a driver hits you during this phase, you are likely relying on their personal insurance, which might deny the claim because they were using the car for business. A car wreck lawyer often has to fight the personal insurer to get coverage here.
Period 2: The “En Route” Phase
- Status: The driver has accepted your request and is driving toward you.
- The Change: This is where SB 371 actually adds a layer of complexity.
- New Coverage: The new law mandates a $200,000 excess coverage policy for this period. This is designed to protect the public (pedestrians, other cars) while the Uber driver is rushing to pick you up.
- Why it Matters: If you are a pedestrian hit by an Uber driver who is looking at their phone to find a passenger, your Santa Ana lawyer now has a specific $200,000 bucket to target, which is an improvement over the previous murky regulations for this specific timeframe.
Period 3: The “On Trip” Phase
- Status: You (the passenger) are inside the vehicle.
- The Change: This is where the massive cut happens. Previously, this period had the “Million Dollar Blanket.”
- New Reality: As discussed, the UIM limit drops to $60,000. However, the Liability Coverage (if the Uber driver causes the wreck) generally remains at $1 million.
- Crucial Distinction: If your Uber driver hits a tree, you (the passenger) can still access a $1 million policy because that is a Liability claim.
- If a drunk driver hits your Uber, you are stuck with the $60,000 cap because that is a UIM claim.
The “Grey Area” Disputes
Insurance companies love to argue about when one period ends and another begins.
- Example: If you are opening the door to get into the Uber and another car hits the door, are you in Period 2 or Period 3?
- Uber might argue you weren’t “in” the car (Period 2), so the UIM limits don’t apply.
- Your rideshare accident lawsuit will argue you were in the act of boarding (Period 3), triggering different protections.
Why You Need a “Forensic” Approach
Because these limits are now so tight, personal injury law firms are having to become forensic accountants. We have to pinpoint the exact second the accident occurred relative to the app data.
If you are involved in a rideshare passenger rights 2025 case, do not give a recorded statement to the insurance adjuster until you have verified which “Period” they have classified your accident under. If they classify it wrong, you could lose access to hundreds of thousands of dollars in potential coverage.
Conclusion: Protecting Your Rights in a Changing Landscape
The passage of SB 371 signals a shift in California’s approach to the gig economy. While it offers drivers more labor protections, it shifts the financial risk of accidents onto passengers and their health insurance providers.
If you are injured in a rideshare accident, the “automatic” million-dollar payout is gone. You now face a complex web of:
- Lyft insurance coverage changes California (The $60k cap).
- Statute of limitations pressures (2 years to file).
- Aggressive adjusters trying to minimize medical expenses payouts.
Next Steps for Victims:
If you or a loved one has been injured, do not assume the rideshare app will take care of you. You need to immediately request a copy of the driver’s insurance “period status” at the time of the crash.
