I concur in the dissenting opinion of Justice Richardson and add the following comments.
The California Legislature instituted arbitration as an alternative to litigation in uninsured motorist cases by requiring that disputes over liability and value be settled by agreement, or failing that, by arbitration. (Ins. Code, § 11580.2, subd. (f); see also, Crofoot v. Blair Holdings Corp. (1953) 119 Cal.App.2d 156, 183-184 [260 P.2d 156]; Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1972) 24 Cal.App.3d 35 [100 Cal.Rptr. 791].) On sharply conflicting creditable evidence of fault, Farmers offered part but the claimant demanded the total policy limit. 1
The majority’s holding, that a first party insurer may not “guess wrong,” effectively abolishes the present statutory scheme for handling uninsured motorist claims. We may anticipate arbitration, pursuant to Insurance Code section 11580.2, will no longer be used to resolve these disputes because the penalty for losing in arbitration will be an automatic second proceeding in superior court for “bad faith” breach of the insurance policy. Thus, all claims must necessarily be paid regardless of how frivolous. And who is it that will ultimately bear the burden? Obviously, it is the general motoring public through massive increases in premium. Today, 25 percent of the public cannot afford car insurance. 2 Tomorrow, under the majority’s strict liability holding, the percentage must increase thus creating more uninsured motorists, consequently more uninsured motorist claims. When this cycle has run its course even fewer motorists will exist who can afford insurance.
Clearly, this was not the purpose the Legislature had in mind in creating its statutory form of coverage. If these claims are to be handled on a “no fault” basis, then the Legislature should say so, but “no fault” should not be instituted by this court in punishment of insurance companies who have merely acted pursuant to the Legislature’s comprehensive program.
Appellant’s petition for a rehearing was denied September 27, 1978, and on September 7, 1978, the.judgment was modified to read as printed above. Clark, J., and Richardson, J., were of the opinion that the petition should be granted.
