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

Manager, Content Quality

Credentials
  • Licensed Insurance Agent — Property and Casualty

Ross joined The Zebra as a writer and researcher in 2019. As a licensed insurance agent, he specializes in writing insurance content to help shoppers…

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. No phone number required.

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...

If I accidentally drove my car through a neighbor's fence, will my insurance company pay for the damage?

The liability portion of your policy is intended to pay for damage that you cause to another vehicle or property. This should include fixed objects like street signs, fire hydrants, and in your case, a fence. The process to file a claim is pretty simple. Just contact your insurance company and let …
Jun 12, 2017 St George, UT

What happens if I stop paying for my SR22?

If you stop paying for the SR-22, the insurance company is then required to notify the state that the policy has been canceled. Typically, the state will suspend your license and you may have additional fines as well. Keep in mind that license suspensions show up on your motor vehicle report which …
Jan 31, 2019 Miami, FL

If my girlfriend is moving in with me, should we get separate renters insurance policies?

Here is a good article on sharing renters insurance with a roommate. In my personal opinion, sharing a policy with any person who isn't a spouse is not a good idea. The amount of coverage on the policy is split in half and any claim made by the other party will also be attached to your insuran…
Apr 20, 2017 Lee's Summit, MO

Can I drive a truck I'm buying across state lines, without plates, to get it home?

I would call up your local DMV or appropriate state department and ask them what to do. Most states allow you to pay a small fee and show an out of state status and they will issue you a temporary paper plate for the vehicle to be relocated. You should have no issues transporting the truck across s…
Aug 29, 2019 Pennington, NJ