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How would I categorize a GIECO insurance claim?

CameronCameron Member Posts: 32

I had $800 come in from a GIECO claim because I got in a car accident and there was a settlement for medical bills and pain and suffering.

How would I categorize this income? Is it separate from the business or related since it impacted my work?

What would be the name of this type of account?

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edited April 12, 2021 in Accounting Technical Support

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    AlexLAlexL Member Posts: 2,869 ✭✭✭

    Hey @Cameron , because we're getting into insurance claims and how this affects your business, I'd highly recommend you reach out to an accountant or CPA who should be able to guide you on the best way to account for this so that it doesn't have a negative impact on your business.

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    Gabriel_KrozkinGabriel_Krozkin Member Posts: 22 ✭✭

    Hi @Cameron

    The purpose of the insurance payment to you is to compensate for your loss (i.e. if the car was damaged, you spend money fixing it -expense- and the insurance claim is recorded as income (in an income account) to "eliminate" (hopefully) the expense that you experienced fixing your car.

    Now, if you are referring to the medical bills, pain and suffering, seems more like a personal (to you) payment rather than your business claim.

    If you are still going to record the proceeds in the business, it is also an Income Account that they should be recorded.

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