California Class Action Targets Allstate Over Lyft UM/UIM Insurance Compliance

A class action lawsuit filed in California alleges that Allstate Insurance and its subsidiary North Light Specialty Insurance violated state consumer protection laws by charging Lyft passengers for insurance coverage that did not comply with California regulations. The complaint, submitted on November 18, 2025, claims that the insurers provided a product purported to offer robust uninsured/underinsured motorist (UM/UIM) coverage but instead delivered coverage that was secondary rather than primary, as mandated by law. California law requires Transportation Network Companies (TNCs) like Lyft to provide passengers and drivers with a primary $1 million UM/UIM policy to ensure immediate compensation for injuries caused by uninsured or underinsured drivers. The plaintiffs argue that Allstate and North Light designed an unlawful insurance product that excluded numerous damages, including medical expenses for injured drivers, thereby circumventing these requirements. The lawsuit suggests that this approach allowed the insurers to offer Lyft lower premiums by substantially reducing their own exposure to risk, providing an unfair competitive advantage at the expense of Lyft's customers who funded the policy. Similar litigation targeting Progressive and Blue Hill Specialty Insurance for Uber rideshare policies highlights a broader issue within the TNC insurance market. The plaintiffs seek to represent all individuals who paid for Lyft rides in California between October 1, 2020, and October 1, 2022, claiming violations of state consumer law. They are pursuing class certification, monetary damages, legal fees, and a jury trial. The case is pending in the U.S. District Court for the Northern District of California. This lawsuit follows other regulatory challenges faced by Allstate, including a Texas investigation into allegations that the insurer unlawfully collected and sold consumer driving data through telematics devices. These developments underscore ongoing regulatory scrutiny of insurance products linked to emerging transportation and data technologies, with significant implications for compliance and risk management in the sector.