Because the purpose of insurance is to "make you whole," you should generally only receive enough payment to bring you back to the state you were in before an incident occurred. You might receive a substantial payout from an insurer to fix your home, but if the money is only used to repair your home to its previous state, it won't be taxable.
So as long as you used all of the money for qualified repairs to the house, none of it is taxable.
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