Ask an Agent
Have a question? We're here to help.
Ask an agent for free
Question

Are insurance proceeds taxable?

I was in an accident recently where the other driver was at fault. When I get the payout for the damages to my vehicle, will I have to report them as part of my income?

Sep 24, 2019 Dudley, MO

Answer
Author profile picture

Ross Martin

Insurance Writer

Credentials
  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

Ross h…

Thanks for your question! In general, insurance proceeds, or money you receive as part of a claim or settlement, are not taxed. This is because insurance payouts are not actually making you money, but bringing you back to your previous status. The IRS only taxes income, while these proceeds are just "making you whole." This goes for bodily injury and property damage payouts.

If you have any further questions, please let us know

Ask an Agent
Have a question? We're here to help.
Ask an agent for free

Insurance is complicated, but it doesn't have to be.

The Zebra searches all of the top insurance companies, in one place, so you can compare the cost and coverage you need to protect your car, home and other property.

Step 1: Tell us a little about yourself

Choose an insurance product and enter your zip code to get started.

Step 2: Sip your coffee while we find the best quotes

Enter the necessary information and then sit back while we find quotes from 100 top insurance carriers.

Icon Fill Form

Step 3: Compare your quotes

Compare quotes side-by-side to find the right match for you, whether it's home, auto, or more.

Icon Agent

Step 4: Let our agents do the hard work for you

Once you pick your policy, our agents are here to get you over the finish line. Then just relax and enjoy your savings.

Compare insurance rates today!

Location pin icon
No junk mail. No spam calls. Free quotes.

Related Questions

Other people are also asking...

Does my son-in-law's military status (Marine) qualify me as USAA member?

It is my understanding that USAA eligibility flows "downstream" – which means you need to be a child or spouse of an established member to get a USAA policy. Therefore parents, or in your case in-laws, of USAA members are likely not eligible to get their own policy. This applies to all in…
Feb 15, 2018 Austin, TX

Does car insurance cover vet bills for injured dogs?

Sorry to hear about your accident. There are some insurance companies that offer pet coverage for this exact situation, but if not, the injuries to your pets should be covered by the property damage liability of the at-fault party's insurance. I would collect all info and receipts and turn thi…
May 5, 2019 Star Valley Ranch, WY

My car was towed by an apartment complex. Will State Farm reimburse me for the towing cost?

Roadside assistance covers towing but it won't cover your car being towed by someone else. Unfortunately, that means State Farm will likely not cover the cost of your car being towed from just being parked in the wrong location in an apartment complex. Sorry for the inconvenience. If you have …
Aug 20, 2019 Crosby, TX

It is illegal to pay for someone else's car insurance

While it is not illegal to pay for someone else's policy, you might run into issues if she's on your policy as well. Car insurance is regulated at the state level and priced at the zip code level. So, if she's on your car insurance policy but not living at your residence, you will pr…
Jun 24, 2018 Pinellas, FL