This gets complicated and you may want to have this reviewed by a CPA.
The grant appears to be allowed if you have more than a 50% loss, presumably due to a hurricane.
If this is a hurricane loss, you can deduct the loss, but that has a high deductible and you may not actually get a tax benefit from your loss. Then, if the insurance pays more than the amount of the loss, the difference may be taxable. I can't tell you the best way to report this, you may want expert help.
