This is they way I recorded a recent payment from my insurance company for a auto body damage claim:

Click on new

Click on bank deposit

Go to "add funds to this deposit" section

For received from, choose the name of your insurance company.

For account, choose the account you will use to pay for the repairs. I chose "truck repair and maintenance."

For description, "proceeds from accident claim" or something like that.

Enter other fields as appropriate, including the amount, then save.

Does it really matter if you use an income account or an expense account to show this payment I received? My accountant may have an opinion, and I may ask him if I remember at tax time. But often we users of Quickbooks are much too concerned about these nitty gritty issues. I received roughly $1k from my insurance company, and paid the body shop $1.5k which included the deductible. No matter how I categorize what I received, I still paid out more than that amount, and thus I have a net expense. Some users will be concerned that the money received will show up as taxable income. It would, if you didn't have an accompanying expense, especially if you receive the money one year and get your vehicle repaired another year, and I guess that technically if you don't plan to get your vehicle repaired that there would be a more complicated treatment of the money you received since the value of your vehicle went down by the same amount that your income account went up. But since I did get my vehicle repaired, I matched both the income and expense in the same account.