A Complete 2026 Guide to California’s TNC Insurance Requirements, Coverage Periods, and Senate Bill 371
California has more active Uber and Lyft drivers than any other state, and a significant number of them are driving with a critical coverage gap they are not aware of. A standard personal auto insurance policy in California does not cover you the moment you activate a rideshare app. This is not a technicality buried in fine print. It is a commercial use exclusion that most personal auto policies apply explicitly, and California law has recognized it since 2015 by requiring Transportation Network Company (TNC) drivers to carry appropriate insurance across all three phases of rideshare activity.
The stakes of getting this wrong are significant. A denied claim during a rideshare shift leaves the driver personally liable for any damages, injuries, and legal costs that result from the incident. In 2026, California’s rideshare insurance landscape also changed meaningfully with the passage of Senate Bill 371, which altered the uninsured motorist coverage requirements for TNCs. This guide explains how California’s three-period framework works, what coverage each period requires, what changed in 2026, and what rideshare drivers need to do to make sure they are properly covered throughout every shift.
Why Your Personal Auto Policy Does Not Cover Rideshare Driving in California
Most California auto insurance policies include a commercial use exclusion. This provision states that the policy does not apply when the vehicle is being used to transport passengers for compensation or operated in connection with a livery or rideshare service. The moment a rideshare driver activates their app, that exclusion may apply.
The gap is most dangerous during Period 1, which is the phase when the app is on but no ride has been accepted. This is when many drivers assume they are covered by their personal policy because they are technically not yet driving for a passenger. In reality, the app being active signals commercial use, and a personal insurer may deny a claim that occurs during this phase.
California law has addressed this by requiring TNC platforms to provide contingent coverage during Period 1. However, the coverage the TNC provides during Period 1 is substantially lower than during later phases, and collision coverage for the driver’s own vehicle is typically not included. For full protection during every phase of a rideshare shift, a personal policy with a rideshare endorsement or a standalone commercial auto policy is necessary.
Under California Public Utilities Code Section 5432, TNCs are legally required to notify drivers that most personal insurance policies exclude coverage once the rideshare app is activated. Despite this disclosure requirement, our agents at Global Guard Insurance regularly encounter California rideshare drivers who assume their personal policy provides complete coverage throughout their shifts and discover the gap only after a claim is denied.
California's Three-Period TNC Insurance Framework
California’s regulatory framework, established under Assembly Bill 2293 and administered through the California Public Utilities Commission (CPUC), divides rideshare driving into three distinct coverage periods. Each period carries different insurance requirements and different levels of protection from the TNC’s commercial policy.
Period 1: App On, No Ride Accepted
During Period 1, the driver has activated the rideshare app and is available to receive ride requests, but has not yet accepted one. Under California law, the TNC must provide contingent third-party liability coverage during this period, with additional excess liability coverage on top of those primary limits. This coverage is contingent, meaning it applies only if the driver’s personal policy does not cover the incident. Because most personal policies exclude commercial use, TNC coverage typically applies during Period 1 by default.
Period 1 is the most underinsured phase of a rideshare shift. Collision coverage for the driver’s own vehicle is typically not provided by the TNC during this period. Drivers who want protection for their own vehicle while the app is on must carry a rideshare endorsement or commercial auto policy that specifically extends collision coverage into Period 1.
Period 2: Ride Accepted, En Route to Pickup
Period 2 begins the moment a driver accepts a ride request and continues until the passenger enters the vehicle. During this phase, California law requires the TNC to provide significantly higher primary commercial liability coverage, covering injuries to other parties in the event of an at-fault accident. This primary coverage represents a substantial increase from the contingent coverage in Period 1. However, even in Period 2, collision coverage for the driver’s own vehicle may not be included unless the driver carries a qualifying rideshare policy.
Period 3: Passenger In the Vehicle
Period 3 covers the trip from the moment the passenger enters the vehicle until they are dropped off. During this phase, California law requires TNCs to provide their highest level of primary commercial liability coverage, equivalent to the Period 2 limits. Collision coverage for the driver’s own vehicle may be available through the TNC’s policy during Period 3, typically subject to a deductible, if the driver does not carry their own collision coverage.
What Changed in 2026: Senate Bill 371
On October 3, 2025, Governor Gavin Newsom signed Senate Bill 371 into law, with provisions taking effect January 1, 2026. SB 371 made the most significant change to California’s TNC insurance framework since the original regulations were established in 2015.
The most consequential change affects uninsured and underinsured motorist (UM/UIM) coverage during Periods 2 and 3. Under the previous framework, California required TNCs to provide a high level of UM/UIM coverage when a passenger was in the vehicle, protecting passengers who were injured in an accident caused by an uninsured driver. SB 371 substantially reduced the UM/UIM requirement for TNCs, replacing the previous high limit with a significantly lower cap that aligns more closely with standard commercial insurance minimums.
The practical effect of this change is that California rideshare passengers have less protection against uninsured drivers during Periods 2 and 3 than they did before January 1, 2026. For rideshare drivers, the UM/UIM reduction primarily affects what the TNC’s policy covers on their behalf. Drivers who carry their own UM/UIM coverage through a rideshare endorsement or commercial policy are not dependent on the TNC’s UM/UIM limits for their own protection.
SB 371 was presented by its supporters as a measure to reduce TNC operating costs and lower ride prices for consumers. Critics argued that it transferred financial risk from large TNC platforms to the passengers and drivers who can least afford to absorb it. Regardless of the legislative intent, the practical result for California rideshare drivers and passengers is reduced backstop coverage in the event of an accident involving an uninsured driver.
Rideshare Endorsement vs. Commercial Auto: Which Do You Need?
California rideshare drivers have two primary options for satisfying the coverage requirements beyond what the TNC’s own policy provides. The right choice depends on how frequently and intensively the driver uses their vehicle for rideshare.
A rideshare endorsement is an addition to a standard personal auto policy that extends coverage into the rideshare periods, including Period 1. Not all California personal auto carriers offer rideshare endorsements, so you may need to switch carriers or add a second policy. A rideshare endorsement is generally appropriate for part-time drivers who work occasional shifts and log moderate annual mileage for rideshare purposes. It provides a cost-effective way to close the Period 1 gap and extend personal policy protections, including collision, across rideshare activity.
Commercial auto insurance is a standalone policy designed for vehicles used primarily for business purposes. It is generally more appropriate for full-time rideshare drivers, drivers who work multiple app platforms simultaneously, or drivers whose rideshare activity generates the majority of their vehicle’s annual mileage. Commercial auto policies typically provide broader coverage and higher liability limits than a personal policy with a rideshare endorsement, but they also carry higher premiums.
Determining which option fits your situation involves evaluating your driving pattern, the carriers available to you, and how much of your annual mileage is attributable to rideshare versus personal use. Speak with a Global Guard Insurance agent to compare both options for your specific situation and find the most appropriate coverage at a competitive rate.
Frequently Asked Questions
Does my personal auto insurance cover me when driving for Uber or Lyft in California?
No. Standard personal auto insurance policies in California include a commercial use exclusion. The moment you activate a rideshare app, your insurer may treat your vehicle as being used for commercial purposes and deny a claim that occurs during that period. California law requires rideshare insurance coverage during all three app periods. You must satisfy this requirement to drive legally for any TNC in California and to ensure your claims will not be denied during a rideshare shift.
What are the three insurance periods for Uber and Lyft drivers in California?
California’s TNC framework divides rideshare driving into three periods. Period 1 is when the app is on but no ride has been accepted. Period 2 begins when a ride request is accepted and continues until the passenger is picked up. Period 3 covers the full duration of the trip from passenger pickup to drop-off. Each period carries different insurance coverage requirements and different levels of protection from the TNC’s commercial policy, with Period 1 providing the least coverage and Period 3 providing the most.
What insurance does Uber or Lyft provide during Period 1 in California?
During Period 1 in California, Uber and Lyft provide contingent third-party liability coverage plus an additional excess liability layer above that primary amount. This coverage is contingent, meaning it applies only if your personal policy does not cover the incident. Because most personal policies exclude commercial use, TNC coverage typically becomes the primary coverage during Period 1. However, the limits during Period 1 are significantly lower than during Periods 2 and 3, and collision coverage for your own vehicle is typically not included.
What changed about California rideshare insurance in 2026?
Senate Bill 371, signed in October 2025 and effective January 1, 2026, significantly reduced the uninsured and underinsured motorist (UM/UIM) coverage required of TNCs in California during Period 3. The previous framework required TNCs to carry a high UM/UIM limit when a passenger was in the vehicle. The new law substantially reduced that requirement. Passengers in California rideshare vehicles now have less UM/UIM protection from the TNC’s policy if they are hit by an uninsured driver during a trip than they did before January 1, 2026.
Do I need a rideshare endorsement or commercial auto insurance in California?
The right choice depends on how frequently and intensively you drive for rideshare. A rideshare endorsement added to your personal auto policy is typically sufficient for part-time drivers who work occasional shifts and log moderate annual mileage for rideshare. Commercial auto insurance is more appropriate for full-time rideshare drivers, those who use multiple platforms simultaneously, or drivers whose rideshare activity accounts for the majority of their annual vehicle mileage. An independent agent can help you evaluate which option fits your driving pattern and budget.
Does California rideshare insurance cover damage to my own vehicle?
The TNC’s commercial policy focuses on third-party liability coverage during Periods 2 and 3. Collision coverage for your own vehicle during rideshare periods is contingent on whether you carry collision through your own rideshare endorsement or commercial auto policy. During Period 1, your own vehicle damage is typically not covered by the TNC’s policy at all. Drivers who want protection for their vehicle throughout all app periods must carry a rideshare endorsement or commercial policy that specifically includes collision coverage across all rideshare periods.
Are California rideshare drivers protected by Proposition 103?
Yes. California rideshare drivers are covered by Proposition 103 for the personal auto portion of their coverage. This means insurers cannot use your credit history to set your personal auto rate, and California’s Good Driver Discount applies to qualifying drivers. Rideshare endorsements and commercial auto policies operate under different regulatory frameworks, so the application of Proposition 103 protections varies by product. An independent agent familiar with California’s TNC requirements can clarify how these protections apply to your complete coverage structure. Get a free California rideshare insurance quote to review your options.
Get the Right Rideshare Insurance for California Drivers
Driving for Uber or Lyft in California without the right coverage is a risk no driver can afford. The licensed agents at Global Guard Insurance can review your current policy, identify any coverage gaps, and find the right rideshare endorsement or commercial auto option across multiple California carriers. Call (800) 750-9115 or get your free California rideshare insurance quote today.