Assembly committee advances bill to cut rideshare uninsured/underinsured motorist limits

Sen. Cabaldonsponsored SB 371, which would reduce uninsured and underinsured motorist (UIM) coverage requirements for transportation network companies, was given a due-pass recommendation by the Assembly Communications and Conveyance Committee after debate and amendments Thursday, with the measure referred to the Appropriations Committee.

The bills sponsor and company witnesses said the change aims to make rideshare trips more affordable and direct more money to drivers; consumer advocates and labor groups countered it would sharply reduce protections for injured riders and drivers.

SB 371 would lower the UIM requirement from $1,000,000 to a new tiered floor (as amended in committee), and would require a joint study by the Department of Insurance and the California Public Utilities Commission (PUC) on the bills uninsured/underinsured motorist impacts. "This bill is intended to lead to reduced fares and to provide additional dollars to drivers," Sen. Cabaldon said, arguing the current $1,000,000 UIM requirement exceeds the exposure that actually occurs and contributes to higher fares.

Ramona Prieto, director of public policy for Uber, told the committee: "Today, each trip is covered by multiple forms of insurance... And lastly, a million dollars of uninsured and underinsured motorist coverage, UIM, for when drivers are not at fault. No other vehicle on California roadways carry this policy... And this policy has become the single biggest cost driver to riders." Nick Johnson, policy director at Lyft, said the proposed limits would still leave California above most other states and "would adequately cover the majority of UM/UIM claims occurring on our platform."

Opponents said the proposed cuts are substantial. "This bill proposes a drastic reduction in the uninsured and underinsured motorist coverage required of Uber and Lyft from $1,000,000 down to just $100,000 per person or $300,000 per incident," Casey Johnson, vice president of Consumer Attorneys of California, told the committee, calling the reduction a "90% cut in protection" for injured parties. He and other critics urged safeguards to ensure savings are passed to riders and to preserve access to compensation for serious injuries.

Labor and consumer groups pressed two themes: that drivers (many of whom remain statutory independent contractors after Proposition 22) could face financial gaps for certain harms, and that the bill lacks an enforceable mechanism guaranteeing any company savings will be passed through to riders or drivers. Sarah Flocks of the California Labor Federation said the bill "is about affordability, but there is no guarantee that the money saved by the companies will be passed on to riders or drivers."

Committee members asked for concrete ways to track whether any premium savings actually lower fares or increase driver earnings. Sen. Cabaldon and company witnesses said they were open to follow-up measures and to a statutory or programmatic audit mechanism; Lyft described an internal business commitment that a fixed share of fares goes to drivers as one operational path for ensuring benefits reach drivers.

The committee adopted the author's amendments (including clarifying that the PUC and Department of Insurance will study impacts and making the insurer policy primary in stacking disputes) and approved the measure as amended. The committee recorded the bill as due-passed and referred it to the Appropriations Committee (motion and second on the record; the committee action was recorded as "due passed as amended").

Votes at a glance: The committee roll call produced a vote in favor; the clerk later recorded SB 371 as out of committee (9 ayes, 0 noes). The bill will proceed to Appropriations for further consideration.

Looking ahead: Proponents and opponents said they intend to continue negotiations on statutory language that would produce concrete, auditable pass-throughs of any vendor savings to riders and drivers, and committee members signaled they will monitor the PUC/Department of Insurance study and any follow-up bills designed to guarantee consumer or worker benefit.