Sec 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.