Did you read the New York Times article which I linked above?

My educated guess is that commercial liability insurance is prohibitively expensive for most uberX drivers.

The problem is that the drivers' personal insurance does not cover them when they're charging people for rides. Uber takes the position that if its drivers are merely driving around looking for riders with their Uber app, they are not providing services on the Uber system, and thus Uber is off the hook. The insurance companies take the position that Uber drivers are in fact engaging in commercial activity and providing a service to Uber while actively looking for riders. Thus, we have a problem that the drivers are not insured while looking for fares and, at least in California, are grossly underinsured compared to licensed taxi drivers when carrying passengers.