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Senate committee advances bill to clarify rideshare insurance responsibility amid insurer cost concerns
Summary
SB 371 would remove a statutory requirement that drivers personally hold $1,000,000 in uninsured/underinsured motorist (UIM) coverage and clarify the responsibility lies with transportation network companies (TNCs); committee passed the measure to Appropriations after competing testimony from TNCs and consumer advocates.
Senator Cabaldon presented SB 371, which would remove the driver obligation to carry $1,000,000 in uninsured and underinsured motorist coverage for transportation network trips and make the liability responsibility explicit for the transportation network companies.
John Finley, representing Uber Technologies Inc., told the committee that "we are not talking about coverage for accidents caused by a rideshare driver" but rather coverage for when another motorist is at fault and either uninsured or underinsured. Malcolm McFarland of Lyft said escalating insurance costs and litigation have made UIM requirements a large portion of ride fares: "Lyft has calculated that on average, at least $6 per ride is allocated to cover insurance related costs in California."
Consumer groups opposed the change. Sabina Tucker of the Consumer Attorneys of California said the statutory UIM requirement has protected passengers and drivers and that there is insufficient publicly available data to justify reducing coverage: "Without that information, it's irresponsible to reduce coverage levels." Other consumer witnesses requested transparent claims and accident data from TNCs before any reduction.
The author acknowledged the need for further data and said amendments submitted to the committee address data reporting. After discussion, the committee voted to pass the bill as amended to the Appropriations Committee. The committee roll call recorded the motion passing 13‑0. The measure is now pending fiscal review and any further amendments in Appropriations.
