Car insurance money received as a payout for a claim is generally not considered taxable income. The Internal Revenue Service (IRS) does not typically tax car insurance payouts that are received as a result of an accident, theft, or other covered events. This is because the purpose of car insurance is to restore the policyholder to the same financial position they were in before the loss occurred. However, there are some exceptions to this general rule. For example, if the car insurance payout includes compensation for medical expenses or lost wages, these amounts may be subject to taxation. Additionally, if the insurance payout exceeds the actual loss or the policyholder receives a payment for punitive damages, these amounts may be taxable. It's important to consult with a tax professional or refer to IRS guidelines for specific situations to determine the tax implications of car insurance payouts. In summary, car insurance money is typically not taxable, but there are exceptions for certain types of payouts.