20-271. Lienholders; proof; accidents; notice;
applicability
A. An insured or claimant shall provide information as part of the proof of
loss concerning the existence of any lien or encumbrance against the vehicle involved in
the accident or incident giving rise to the damage or loss. A claim shall not be an
acceptable proof of loss until satisfactory evidence of the existence of any lien or
encumbrance has been provided to the insurer. This section shall not apply if the amount
of damages or loss does not exceed two thousand five hundred dollars.
B. An insurer shall be entitled to rely upon information provided by the insured or
claimant pursuant to subsection A concerning the existence of any lien or encumbrance
against the vehicle. An insurer that acts in good faith upon the information provided by
the claimant or insured shall not be liable for any damages arising from the insured's or
claimant's failure to provide accurate information to the insurer concerning existence of
any lien or encumbrance against the vehicle involved in the accident or incident giving
rise to the damage or loss.
C. An insured or claimant shall be liable for any damages arising from the failure
of the insured or claimant to provide accurate information pursuant to subsection A
regarding the existence of any lien or encumbrance against the vehicle involved in the
accident or incident giving rise to the damage or loss.
D. This section shall not apply if an insurer does either of the following with
respect to the repair of damages or loss to a vehicle:
1. Issues a release of claims in the names or makes the proceeds payable to both
the insured or claimant and all lienholders or vehicle lessors.
2. Makes the proceeds payable to the motor vehicle repair facility after
verification by the insurer that the damage or loss has been repaired.
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