What Californians Need to Know About SB 371 and Reduced Motorist Insurance Coverage

A new proposal in Sacramento could leave rideshare drivers and passengers with far less protection after an accident, according to Farid Yaghoubtil, a personal injury attorney and founding partner of the Downtown L.A. Law Group.

Senate Bill 371 (SB 371) introduced in the 2025-2026 legislative session, would reduce the amount of uninsured and underinsured motorist coverage (UM/UIM) that transportation network companies such as Uber and Lyft are required to carry.

Why Uninsured and Underinsured Motorist Coverage Matters

“UM and UIM coverage is a driver’s financial safety net,” Yaghoubtil explains. “It protects you when the other driver either has no insurance or not enough to cover the damages.”

That coverage typically pays for hospital care, surgeries, lost wages, and ongoing rehabilitation. Without it, injured Californians are often forced to pay out of pocket for accidents they didn’t cause.

What SB 371 Would Change

Under current California law, transportation network companies (TNCs) – the rideshare services many Californians use every day – are required by the Public Utilities Commission to provide $1 million in uninsured and underinsured motorist coverage from the moment a passenger enters a rideshare driver’s vehicle until the moment they exit. That $1 million policy can cover medical bills, lost wages, and long-term care if an accident occurs. 

However, under SB 371, the current $1,000,000 in uninsured and underinsured motorist coverage would be reduced to just $60,000 per person and $300,000 per incident. 

“These reduced limits won’t come close to covering the real costs of a serious accident,” Yaghoubtil warns. “A single hospital stay or surgery can exceed $60,000. Add rehabilitation and lost income, and victims could be financially devastated.”

The bill also shifts responsibility by making TNCs, not individual drivers, solely responsible for maintaining UM/UIM coverage — a change that critics say weakens accountability and transparency.

Why SB 371 Puts Drivers and Passengers at Risk

Farid Yaghoubtil has represented many Californians who relied on UM/UIM coverage after devastating crashes. “Without that safety net, I’ve seen families lose everything,” he said. “Lowering limits doesn’t reduce the true cost of accidents — it simply transfers the burden to victims.”

One of them is Camillo Morales, who was walking to work when he was hit by a vehicle earlier this year. He needed multiple surgeries, was out of work for six months, and fell behind on his bills and rent, which ultimately left his family homeless.

His story isn’t unique. Accidents like his happen every day, and reducing insurance protections would leave even more families vulnerable to the same fate.

“Supporters of SB 371 may claim that current insurance limits are sufficient,” Yaghoubtil added. “But those numbers were set for a reason. Real-world losses, from hospital stays, surgeries, ongoing rehabilitation, and months of lost income can add up quickly. Settlements almost never stretch far enough, and lowering coverage only makes the gap larger. Serious injuries don’t get cheaper just because lawmakers cut coverage.”

What Californians Can Do Right Now

For rideshare drivers, SB371 means relying on company-provided UM/UIM coverage that may fall short after a major collision. For passengers, it means potential exposure if they’re hurt in a ride.

Yaghoubtil recommends reviewing personal auto policies now. “Ask your insurer about increasing your own uninsured or underinsured motorist coverage,” he said. “That extra protection can make the difference between financial recovery and financial ruin.”

Consumers can also contact their legislators to express concern about SB 371 and support efforts to preserve the existing $1 million requirement.

The Bigger Picture

California leads the nation in rideshare use. Uninsured and underinsured motorist coverage is meant to protect everyone on the road—drivers, passengers, and pedestrians alike.

However, Yaghoubtil warned that if this bill passes, it could set a precedent that erodes insurance protections nationwide.

“Insurance should give people peace of mind – not another battle to fight when they’re already at their most vulnerable,” he added.