Most people who use rideshare apps like Uber and Lyft don’t actively think about insurance coverage if they’re involved in a crash during their ride. Many Californians may not even know that the amount of coverage these companies are required to carry was lowered significantly at the beginning of the year.
Last fall, Gov. Gavin Newsom signed a law that lowered some mandatory insurance limits for rideshare companies. Specifically, the minimum uninsured/underinsured (UM/UIM) coverage for their drivers went from $1 million to just $60,000 for each individual passenger and $300,000 per accident when multiple people are injured.
The new law has been touted as a way to lower rideshare fares. The state lawmaker behind the legislation noted that it was necessary to make these services affordable for more people. The high cost of buying, maintaining and insuring a car in California (not to mention keeping gas in it) leaves a lot of people reliant on rideshare apps to commute to and from school or work and to make other necessary trips.
Was the previously required coverage too high?
Advocates for the lower insurance coverage also argued that the $1 million requirement was too high and hadn’t been changed in California since it was implemented when ridesharing began. The leading rideshare companies said that it made fares in California unnecessarily high. According to Lyft, fares in California were double the average fare nationwide.
Regardless of the insurance coverage provided by rideshare companies, it can be confusing and complex for passengers to get the compensation they’re due after a rideshare crash. Getting early and experienced legal guidance can make all the difference.