Section 7.9 Impairment of Insurer’s Subrogation Rights

• Library: Insurance Practice 2015

If a third-party tortfeasor, with knowledge of an insurer’s subrogation rights and without the consent of the insurer, settles with the insured, the insurer’s subrogation rights are not affected. Farm Bureau Mut. Ins. Co. of Mo. v. Anderson,360 S.W.2d 314 (Mo. App. E.D. 1962); Gen. Exch. Ins. Corp. v. Young, 212 S.W.2d 396 (Mo. 1948).

But if the tortfeasor had no knowledge of the insurer’s subrogation claim and if the release covers all damages sustained by the insured, the subrogation claim has been released. Farm Bureau, 360 S.W.2d 314. The insured would...