The California Legislature has announced the passage of SB 371, a bill introduced by Senator Christopher Cabaldon, aimed at reducing mandatory uninsured motorist coverage for transportation network companies (TNCs) and imposing new reporting obligations to enhance affordability.
According to CalMatters, SB 371, which passed on Sept. 10, seeks to prioritize affordability for riders by lowering uninsured and underinsured motorist coverage requirements from $1,000,000 to $60,000 per person and $300,000 per incident. This reduction is expected to decrease insurance expenses for TNCs, allowing cost savings to be reinvested into lower fares and improved support for drivers and riders. The bill aims to make insurance more affordable so that Californians can continue relying on rideshare services without facing prohibitive costs.
CalMatters also reports that SB 371 delivers an immediate impact on affordability. As soon as the law takes effect, TNCs will no longer face excessively high insurance mandates, translating directly into lower operating costs. This change enables companies to offer reduced fares to consumers and better earning potential for drivers, presenting a faster reform compared to slower-moving legislation.
SB 371 is part of a broader trend in insurance reform aimed at recalibrating coverage levels to reflect real-world risk. Similar updates have been made in other states’ insurance frameworks as industries evolve. The bill requires a collaborative study between the Public Utilities Commission and the Department of Insurance to ensure that the new requirements align with actual consumer and industry risk.
Per the Assembly Committee on Communications and Conveyance, the legislation’s core intent is that cost savings from insurance adjustments should benefit consumers and drivers strategically. By lowering costs, the bill makes ridesharing more accessible across income levels while helping drivers retain more earnings.
Florida provides an example of how insurance reform can benefit consumers directly. According to Insurance Rate Review, since Florida’s 2023 tort and insurance changes, major auto insurers have filed for average rate cuts of 6.5%, property insurance litigation has decreased by nearly 30%, and new insurers have entered the market. These reforms have increased competition while bringing transparency in medical billing and curbing frivolous lawsuits. Lauren Zelt, Executive Director of Protecting American Consumers Together (PACT), said: “The big winners are Florida consumers, who finally get some help to ease their cost of living.”
The California Public Utilities Commission reports that while SB 371 reduces unnecessary insurance costs, it still mandates substantial coverage for personal injury, property damage, and uninsured motorist protection. This balance aims to protect passengers in accidents while removing excessive requirements that inflate fares. By combining strong consumer protection with affordability measures, the bill supports long-term stability for rideshare services in California.
