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Insurance
Auto Insurance
Taxes and Tax Preparation

Do you pay taxes on an auto insurance settlement?

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Wiki User
May 14, 2010 2:29PM

I had a huge settlement from an auto insurance company and it was not taxed. However I believe that was because my attorney negotiated a type of settlement that made it non-taxable. I thnk it has to be considered "punitive damages" or something like that for it not to be taxed.

Update - Generally, amounts paid for personal injury and property damage are NOT taxable. Amounts paid for punitive damages and loss of income ARE taxable.