No, if this was a situation where your car was totalled and you received an insurance settlement, there wouldn't be a taxable event unless this was a business vehicle.
You would subtract your cost basis (what you paid for the car) from the $5K you received to determine a gain or loss. If you paid more for the car than what you received as a settlement, you'd have a loss, but it's not deductible (or reportable) because it's a personal loss.
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