Income from insurance claim

<p>We had damage from Hurricane Ike so we received money from our insurance company. Since we did a lot of the repair work ourselves (which we were permitted to do), we ended up with more money than expenses. Does anyone know how we would show that on the FAFSA? I assume under "other untaxed income"; however, I don't think we should be penalized with regard to financial aid because of a natural disaster. If the FAFSA form just spits out an EFC based on our entries, wouldn't the final figure be distorted?</p>

<p>You do not have to report that income on the FAFSA. Insurance money is free money that the government cannot touch.</p>

<p>It doesn't need to be considered "income", but anything that's left of the disbursement is considered an "asset" and must be reported. Whether "the government [can] touch it" is irrelevant for financial aid purposes.</p>

<p>We received considerable insurance money this year for home and vehicle damage because of a bad hailstorm (*one *of these days I am going to manage to keep a car long enough for trade in value - I am 0 for 3 so far - hail/wreck/hail). The insurance money is certainly not income for FAFSA purposes. Though, as another poster said, if any is sitting in the bank the day you file FAFSA it is a reportable asset. Not a problem in my case.</p>

<p>It is an asset, not income. Assets are protected, unlike income, so they aren't counted dollar for dollar as available money. If you have any expenses coming up that you know you will need to pay, though, you might want to take care of those things before filing the FAFSA.</p>

<p>Thanks for clarifying income vs. assets. Also I guess a note explaining the situation to the finaid office might be in order, too.</p>

<p>Have you run the figures through an EFC calculator? You may find that the asset doesn't make much difference for aid, in which case you don't need to worry.</p>

<p>It wouldn't hurt to send a note to the financial aid office, though.</p>