American Family Mutual Insurance Co. v. Baumann

COYNE, Justice.

At issue here is the adequacy of an insured’s notice to her underinsurer of a proposed or tentative settlement which would prevent the accrual of the underin-surer’s right of subrogation. The district court ruled that the insured had forfeited her rights under the underinsured motorist coverage of her automobile insurance policy, and the court of appeals affirmed. We reverse.

On May 21, 1982 Eleanor Baumann was injured in a collision with a vehicle operated by Carol Ann Weierke under circumstances which left little doubt of Weierke’s liability. On December 14, 1983, about 16…