How to enter insurance claims?

[Dale Alspach]

I would not drop something that is a recovery of damages into an income
account. The damage done to the vehicle resulted in a decrease in the value
of the vehicle as an asset. (I would not account for this if the vehicle
will be completely repaired.)
Because you have insurance, the repair is not an
expense (except for a deductible). You have an
expected payment from the insurance company which should go into an
accounts receivable. Any portion not covered by insurance would be an
expense. When the check from the insurance company arrives, it offsets the
accounts receivable.

So if you pay $500 by check to the repair shop and your policy has a $100
deductible, the transaction would be something like this:

Debit Auto Expense $100
Debit Accounts Receivable Insurance Claims $400
Credit Checking $500

When the check from the insurance company arrives:

Debit Checking $400
Credit Accounts Receivable Insurance Claims $400

Dale Alspach