Deductions & credits

I just realized I think I may have answered my own question as you have just answered, since I didn't receive the insurance payment I didn't need to report it, therefore I'm not liable for any tax on the insurance payment. Therefore, the settlement that I received, since it's considered to be a " Qualified Wildfire" (I have the FEMA DR #) type of compensation is exempt?  Correct me if I'm wrong. Thanks