Wis. Stat. § 632.34
If a policy of automobile liability insurance provides a defense to the insurer for lack of cooperation on the part of the insured, the defense is not effective against a 3rd person making a claim against the insurer unless there was collusion between the 3rd person and the insured or unless the claimant was a passenger in or on the insured vehicle. If the defense is not effective against the claimant, after payment the insurer is subrogated to the injured person's claim against the insured to the extent of the payment and is entitled to reimbursement by the insured.
Wis. Stat. § 632.34
Prejudice is not a component of the defense of noncooperation. Schaefer v. Northern Assurance Co. 182 Wis. 2d 148, 513 N.W.2d 16 (Ct. App. 1994). In Schaefer, the Wisconsin Court of Appeals confirmed that this section had abrogated the common-law requirement of prejudice in non-cooperation cases, but this was true only for cases involving automobiles, to which this section expressly applies. Welton Enterprises, Inc. v. Cincinnati Ins. Co. 131 F. Supp. 3d 827 (2015).