Two rideshare passengers have filed a lawsuit against Allstate and its subsidiary, North Light Specialty Insurance Company, claiming the companies charged passengers for mandatory coverage while allegedly designing their policies to avoid paying claims.
The proposed class action, filed on November 18 in federal court, accuses Allstate and North Light of orchestrating what the plaintiffs describe as a “bait-and-switch” insurance scheme. According to the complaint, the companies generated profits by selling passengers insurance coverage that was technically required for rideshare drivers but structured in a way that could deny claims when they arose.
The lawsuit, brought by Bruno Llerena and Christopher Roselli, focuses on policies provided between October 1, 2020, and October 1, 2025. The plaintiffs argue that North Light designed its Transportation Network Company (TNC) insurance for Lyft to appear compliant with the state’s requirement of one million dollars in uninsured motorist coverage, while in practice including provisions that unlawfully excluded claims for medical expenses and lost wages.
At the heart of the allegations is the intersection between mandatory rideshare insurance and occupational accident coverage introduced by Proposition 22. The complaint claims North Light’s policies included language stating that no payment would be made for any loss if the claimant was “entitled to receive payment” under occupational accident insurance. This effectively shifted coverage away from the required primary protection and made it secondary, undermining passengers’ legal rights to full compensation.
The plaintiffs highlight specific policy provisions they say illustrate the scheme. One clause allegedly states the insurer will only pay “in excess of all other valid and collectible insurance,” directly contradicting state law, which requires TNC coverage to be primary. Another clause reportedly excludes losses if a person is eligible for occupational accident benefits, even though the law only allows offsets for benefits actually paid—not merely those that could be claimed.
According to the lawsuit, this alleged design gave North Light a competitive edge. By reducing potential claim exposure through these exclusions, the insurer could offer Lyft lower premiums, the plaintiffs claim, while passengers effectively funded the coverage through ride fees that could reach up to six dollars per trip.
Adding to the concern, North Light operates as a surplus lines insurer. This status places it outside the state’s standard insurance regulatory framework and excludes it from the state-backed insurance guarantee association, meaning policyholders may have no safety net if the company were to become insolvent.
Allstate is named directly in the lawsuit, with the plaintiffs arguing that the parent company conceived, directed, and controlled the scheme. Evidence cited includes shared executives, office space, email systems, and the fact that Allstate’s Vice President, John Moran, also served as President of North Light.
The proposed class could include any rideshare passengers who used Lyft during the two-year period, potentially covering a substantial number of individuals. The plaintiffs are seeking declarations that the policies violate state law, restitution of premiums paid, compensatory damages, and punitive damages for what they describe as deliberate, fraudulent misconduct.
This lawsuit highlights growing scrutiny over how insurance products for gig economy workers are structured, and it could have wide-reaching implications for both insurers and rideshare platforms.