That’s complicated. We need to know more about what the payment was for and why you received it.
In general, it is not the fair market value that counts, it is your cost basis in the property. If you are reimbursed for the loss of the fair market value, but that is more than you originally paid for the property, part of the payment may very well be taxable. But we need more details. Also, were you required to provide your tax number to the insurance company and are you expecting a 1099 form?