A $940,000 hole opened on January 1
For a decade, California personal-injury attorneys treated the transportation network company (TNC) uninsured and underinsured motorist policy as a reliable seven-figure backstop. A passenger struck by an uninsured hit-and-run driver mid-ride could reach up to $1 million in UM/UIM coverage that Uber or Lyft was required to carry. That assumption died on January 1, 2026.
Senate Bill 371, signed in late 2025 and effective at the start of this year, amended the Public Utilities Code to cut the mandatory TNC UM/UIM floor to $60,000 per person and $300,000 per accident during a ride. That is roughly a 94 percent reduction in per-person coverage. The bill moved as part of a negotiated package with Assembly Bill 1340, which granted rideshare drivers collective-bargaining rights. Drivers gained leverage; injured passengers lost their largest layer of protection.
If your intake team is still valuing rideshare UM/UIM claims on the old $1 million assumption, you are mispricing files. Here is how the strategy changes.
Coverage periods still control the analysis
SB 371 did not touch the period structure that governs every rideshare claim. That framework still decides which policy responds first:
- Period 0: app off. Only the driver's personal auto policy applies.
- Period 1: app on, waiting for a request. Contingent liability coverage applies, and personal UM/UIM may be excluded.
- Period 2 and 3: en route to pickup or carrying a passenger. The TNC policy is primary, and this is where the new $60,000 and $300,000 UM/UIM floor now governs.
The period that matters most for passengers, Period 3, is exactly where the coverage cut lands hardest. A passenger in the vehicle is always in Period 3, so the reduced limit is the default exposure ceiling in almost every passenger claim.
The claimant's own UM/UIM is now the primary lever
With the TNC floor gutted, the injured party's personal UM/UIM coverage moves from a secondary consideration to the center of the file. California personal UM/UIM follows the insured, not the vehicle, so a passenger's own policy generally reaches them even when they are riding in someone else's car. In a serious-injury rideshare wreck caused by an uninsured third party, the recovery math now often runs: TNC UM/UIM first, then the claimant's personal UM/UIM stacked on top, subject to the anti-stacking and offset language in each policy.
This makes the personal policy declarations page a first-week discovery priority. Pull it during intake, not after you have already valued the case. For a broader look at how coverage stacking interacts with comparative fault, see our ongoing coverage under auto accidents.
Stacking arguments that survive carrier pushback
California permits inter-policy stacking in defined circumstances, and the SB 371 cut makes those arguments worth the fight in cases that previously settled inside the TNC limit. Three points to develop early:
- Primary versus excess ordering. The TNC policy is statutorily primary during Period 3. Argue the personal UM/UIM sits excess above it rather than offsetting it, so the claimant reaches both layers.
- Offset language, read narrowly. Carriers will invoke policy offset clauses to credit the TNC payment against the personal limit. Scrutinize whether the clause actually reaches a statutorily mandated primary layer, and whether it was properly disclosed and signed.
- Household policies. A resident relative's policy may add another UM/UIM layer. Identify every policy in the household during intake.
Practical file adjustments for the rest of 2026
Three changes to make now.
First, revise your intake script to capture the client's personal auto carrier and limits on the first call, even when the client was a passenger and assumes their own policy is irrelevant. Under SB 371 it usually is not.
Second, reset settlement expectations with clients early. A catastrophic-injury passenger claim that would have reached $1 million in TNC coverage last year may now depend entirely on stacked personal policies to approach full value. Managing that expectation on day one avoids a painful conversation at mediation.
Third, watch the lien side. A smaller available insurance pool changes the arithmetic of hospital and Medicare lien reduction, because there is less to go around. Build the lien-reduction plan into the case from the start rather than treating it as a closing task. Our liens and settlement coverage tracks the reduction arguments that matter when the fund is thin.
The takeaway
SB 371 did not change the theory of a rideshare case. It changed the money. The TNC policy is no longer the anchor of a serious passenger claim, and the claimant's own coverage carries the load. Firms that adjust intake, valuation, and lien planning to that reality will protect client recoveries. Firms that keep pricing files on 2025 assumptions will leave value on the table and set expectations they cannot meet. For firms rebuilding intake around these changes, our practice operations desk covers the workflow side.