How do you handle insurance claim payments?

Question

We have had a few different insurance claim payments.  How do you handle these scenarios within Quicken?  Our  *previous* bookkeeper labeled them as "other income".  :s

roof replacement ($4k)
 totaled vehicle (check given, used to purchase a new one)
 totaled vehicle, but we bought the salvaged title
 vandalized vehicle (check given, used towards repairs)

I assume I can transfer the ones where a new vehicle was purchased, but we also have instances where the vehicle was totaled and we couldn't find a replacement right away, or where we received $5000 and found a new one for $4000.

Frankx · Answer

Hi @millerswife,

Typically, when you receive a payment from an insurance company related to property, you have had a loss of some type.  The payment is "reimbursement" for that loss. So, The concept is that you should "match" - to the extent possible - the insurance reimbursement with the costs incurred to fix or replace the property.

The reimbursements for the automobile related losses noted above above would usually be posted as follows:* totaled vehicle (check given, used to purchase a new one) - post to the automobile "asset" account

* totaled vehicle, but we bought the salvaged title - post to the automobile "asset" account

* vandalized vehicle (check given, used towards repairs) - post to same account/category that you used when you posted the repairs payment

The "roof replacement" should be posted to the account/category  that you used when you recorded the payment for fixing the roof (or to have the roof replaced).

Let me know if you have any followups.

Frankx

NotACPA · Answer

How did you record the amounts that you paid for those repairs?I'd record the insurance reimbursements using those same categories.