Most people hear “Uber has $1 million in insurance” and assume they are fully protected. For years, that assumption was mostly correct. But as of January 1, 2026, the rules have changed dramatically — and most California riders have no idea how exposed they are.

If you are riding in an Uber or Lyft and an uninsured or underinsured driver causes the crash, the coverage that is supposed to protect you just dropped by more than 90%. At the same time, Uber is backing a ballot initiative that could make it even harder for injured people to find a lawyer or recover their full medical costs. And in the background, the company is filing federal racketeering lawsuits against law firms and doctors across the country.

These are not isolated developments. Together, they represent a fundamental shift in how corporations are rewriting the rules around rideshare injury claims — and ordinary Californians are the ones who stand to lose the most.

What Changed: SB 371 and the New Insurance Limits

On October 3, 2025, Governor Gavin Newsom signed Senate Bill 371 into law. The bill, authored by State Senator Christopher Cabaldon, went into effect on January 1, 2026, and it fundamentally restructured the insurance obligations of rideshare companies like Uber and Lyft.

Here is what riders need to understand: there are two different types of insurance coverage at play, and the distinction matters enormously.

This second scenario is more common than many people realize. California has one of the highest rates of uninsured drivers in the country. When an uninsured motorist causes a crash while you are a rideshare passenger, it used to be straightforward: an attorney would file a UM/UIM claim against Uber’s $1 million policy and fight for fair compensation. Now, the maximum available through that policy is $60,000 per person — an amount that many emergency room visits alone can exceed.

Why Did California Reduce the Coverage?

SB 371 was part of a negotiated compromise between rideshare companies, labor unions, and state lawmakers. In exchange for the insurance reduction, Assembly Bill 1340 granted rideshare drivers the right to unionize and collectively bargain — a historic expansion of labor rights for gig workers.

Uber and Lyft argued that the previous $1 million UM/UIM requirement was excessive compared to other vehicles on the road (no personal vehicle in California is required to carry any UM/UIM coverage) and that the high costs were being passed along to riders through inflated fares. Critics counter that the legislation transfers financial risk from billion-dollar corporations onto the passengers who can least afford it.

The Ballot Initiative: Capping What Victims Can Recover

While SB 371 shrank available insurance coverage, Uber simultaneously filed a proposed ballot initiative that could further limit injured riders’ ability to pursue fair compensation. Initiative 25-0022, formally titled the “Protecting Automobile Accident Victims from Attorney Self-Dealing Act,” is currently gathering signatures for the November 2026 ballot.

The measure is backed by roughly $12 million in Uber funding. Here is what it would do if voters approve it:

Cap contingency fees at 25%. Currently, personal injury attorneys in California negotiate fee arrangements individually with their clients, typically between 33% and 40%. The initiative would require that accident victims “receive at least 75% of the total damages recovered,” effectively limiting attorney fees and case expenses to 25% combined. While that may sound consumer-friendly, the practical effect is different. Personal injury attorneys absorb all upfront costs — medical expert fees, investigations, depositions, and court filings — and only get paid if they win. When the fee is capped at 25% inclusive of expenses, many cases become economically impossible to take on.

Limit medical cost recovery. The initiative would tie recoverable medical expenses to government or database reimbursement rates, which are often far below what doctors actually charge. In practice, this means injured riders could win their case but still not have their full medical bills covered. It could also discourage doctors from treating accident victims on a medical lien basis — the arrangement that allows uninsured and underinsured patients to receive care now and pay from their eventual settlement later.

Apply to all motor vehicle accidents. Despite being funded by Uber, the initiative is not limited to rideshare crashes. It would apply to every car, truck, motorcycle, and pedestrian accident case in California. Anyone injured on the road could be affected.

Uber’s RICO Lawsuits: The Bigger Picture

In parallel with these legislative and ballot efforts, Uber has taken another aggressive step: filing federal civil lawsuits under the Racketeer Influenced and Corrupt Organizations Act (RICO) against several personal injury law firms and medical providers in California, New York, and Florida.

The lawsuits allege that certain attorneys and doctors operated coordinated schemes to inflate personal injury claims — directing clients to pre-selected medical providers who performed unnecessary procedures, submitted artificially inflated bills, and maintained secret side agreements to discount those bills if settlement amounts were insufficient.

As HH Law Firm’s founding attorney Hani A. Habbas wrote in his analysis for Orange County Lawyer Magazine in April 2025, these RICO lawsuits represent a watershed moment in personal injury litigation. Rideshare companies are no longer quietly settling questionable claims. They are naming names, filing aggressive counterclaims, and sending a clear message: the litigation landscape has fundamentally shifted.

Regardless of the merits of individual fraud allegations, the broader implication is significant. When corporations use the legal system to discourage claims — legitimate or otherwise — it creates a chilling effect. Injured people may hesitate to pursue valid cases. Attorneys may decline to take on rideshare injury cases altogether. And doctors may stop treating accident victims on liens, demanding payment upfront instead.

What This Means for Everyday Riders

Taken together, these three developments — reduced insurance coverage, the ballot initiative, and the RICO lawsuits — paint a picture of a rapidly shifting landscape for anyone who rides in an Uber or Lyft in California:

Coverage has shrunk. If an uninsured driver hits your Uber, the maximum available through the rideshare company’s UM/UIM policy is now $60,000 per person. For serious injuries — spinal damage, traumatic brain injuries, burns, or prolonged hospital stays — that amount can be exhausted before recovery truly begins.

Access to lawyers could shrink further. If the ballot initiative passes, capping fees at 25% (including expenses) would make many personal injury cases economically unviable for attorneys to take on contingency. Victims who cannot afford to pay a lawyer out of pocket — which is most people — may be left to negotiate directly with insurance adjusters whose job is to minimize payouts.

Access to medical care could be disrupted. Limiting medical cost recovery to government rates could push doctors away from treating accident victims on liens. For people without robust health insurance — a disproportionate share of California’s rideshare-riding population — this could mean delaying or forgoing necessary treatment.

The bottom line is this: when coverage shrinks, when access to lawyers shrinks, and when access to medical treatment shrinks, the person left holding the bag is the injured rider.

How to Protect Yourself as a Rideshare Passenger

Given these changes, there are concrete steps California riders can take to safeguard their interests:

Review your own auto insurance policy. If you own a car, check your UM/UIM coverage limits. Your personal auto policy’s UM coverage can typically step in to cover you as a passenger in someone else’s vehicle — including an Uber or Lyft. With the rideshare company’s UM coverage now capped at $60,000, carrying higher limits on your own policy is more important than ever.

Consider non-owner auto insurance. If you do not own a car but frequently use rideshare services, a non-owner auto insurance policy with UM/UIM coverage can provide an additional layer of protection that did not used to be necessary.

Document everything after an accident. Save your ride receipt, driver and vehicle information, and trip details from the app. Photograph the scene, vehicle damage, and your injuries. Get a police report. Seek medical attention immediately, even if your injuries seem minor — some serious conditions do not present symptoms right away.

Contact an attorney early. Under the new rules, identifying every available layer of coverage is critical. An experienced rideshare injury attorney can determine which insurance period your accident falls under, pursue claims against multiple policies, and fight for the maximum recovery available. This is not a process most people can navigate alone, especially when insurance companies are incentivized to minimize payouts.

Why HH Law Firm Is Different

HH Law Firm has been tracking these developments closely — not just reporting on them, but actively preparing its practice and clients for the new reality. Founder and attorney Hani A. Habbas was among the first California attorneys to publish a detailed legal analysis of Uber’s RICO strategy, featured in Orange County Lawyer Magazine in April 2025.

The firm operates differently from those now scrambling to explain their practices. There are no backroom deals. No inflated medical liens. No pressure to undergo unnecessary procedures. HH Law works with licensed, ethical, and independent medical providers because the focus is always on the client’s health, their case, and their recovery.

The multilingual team serves communities across Irvine, Santa Ana, San Diego, and Washington, D.C. in English, Arabic, and Spanish. The firm comes to you — whether that means your home, your hospital room, or a virtual consultation. And every case is handled on contingency, which means clients pay nothing unless the firm wins.

Frequently Asked Questions

How much insurance does Uber carry for passengers in California in 2026?

Uber maintains $1 million in third-party liability coverage when the rideshare driver is at fault. However, UM/UIM coverage — which protects you when another uninsured or underinsured driver causes the crash — was reduced to $60,000 per person and $300,000 per incident under SB 371, effective January 1, 2026.

What is Uber’s 2026 ballot initiative?

Initiative 25-0022, backed by Uber with roughly $12 million in funding, would cap contingency attorney fees at 25% of any recovery, limit medical cost reimbursement to government rates, and apply to all motor vehicle accident cases in California — not just rideshare crashes. It is expected on the November 2026 ballot.

Can I still sue Uber if I am hurt as a passenger?

Yes. If the Uber or Lyft driver caused the accident, $1 million in liability coverage is still available. The SB 371 reduction specifically affects UM/UIM claims — situations where a third-party at-fault driver has no insurance or insufficient insurance. An experienced attorney can help identify every layer of available coverage.

What should I do if I am injured in a rideshare accident?

Seek medical attention immediately. Save your ride details and receipt from the app. Get a police report and photograph everything. Then contact an experienced rideshare injury attorney as soon as possible. Under the new 2026 rules, navigating multiple insurance layers and coverage periods requires professional legal guidance. HH Law Firm offers free consultations and can visit your home or hospital.

Does the Uber ballot initiative only apply to rideshare accidents?

No. The initiative would apply to all motor vehicle accident cases in California, including car collisions, truck crashes, motorcycle accidents, and pedestrian injuries. Anyone injured in a traffic accident could be affected by the proposed fee caps and medical cost limitations.

What are Uber’s RICO lawsuits?

In 2025, Uber filed federal civil RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuits in New York, Florida, and California against several personal injury law firms and medical providers. The suits allege coordinated schemes to inflate injury claims through unnecessary treatments and artificially inflated billing. HH Law Firm has always maintained ethical, transparent practices — which is why the firm was among the first to analyze these lawsuits and their implications for the industry.

 

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