Auto Insurance And Quicken: Where Does It Fit?

Quicken is a financial management software that helps users manage their loans and track their insurance claims and payments. When it comes to auto insurance, Quicken allows users to create a loan account for their vehicle, which can be useful in the event of a totalled vehicle or insurance claims and payments. For instance, if a user receives a payout from their insurance company for a totalled vehicle, they can record it under the Adjustment category, which does not show up as income or expense in reports. Alternatively, users can create their own categories, such as Misc. Income or Misc. Expense, for one-off events that don't fall into typical categories. Additionally, Quicken enables users to set up an asset account for their vehicle to track its value and transfer it to their savings account in case of an accident.

Recording insurance claims payments

Using an "Insurance Reimbursement Account"

Create an "Insurance Reimbursement Account" as an offline Asset or Checking account. Record any repair bills as transfers from your Checking or Credit Card account to the Reimbursement account. If the insurance covers only a certain percentage of the total cost, record a Split, with the reimbursed amount as a transfer and the remaining amount as an expense. Record any insurance payments received into your Checking account as transfers to the Reimbursement account to offset the balance. This way, when the insurance company has paid you all the money, the balance in this account should be zero.

Recording as Credits or Creating an Income Category

If you don't want to create a special account, you can record the insurance reimbursements as credits in the expense category you use for the incident. This will show your net cost for that category. Alternatively, create an "Insurance Reimbursements" income category and record the reimbursements there. This makes it easier to separate the total cost and total reimbursements.

Using Tags or a Journal Entry

If you want to link the insurance claim payment to a specific job, you can use "Tags" to track the job cost. Alternatively, create a Journal entry and assign it to a relevant account destination type, such as miscellaneous expenses or receivable/payable, and link the job to the entry's name.

Using "Adjustment" or "Reimbursement" Categories

If you don't want the transaction to show up as income or expense, you can use the "Adjustment" category, which is one of Quicken's special categories. Another option is to use "Personal Income" > "Reimbursement". This will show up in a Category report under income but will not appear on a Tax Schedule report.

Categorising auto insurance payout

Adjustment

This is a special category in Quicken that prevents the transaction from showing up in reports as income or expense.

Personal Income > Reimbursement

This category will show up in a Category report under income but will not appear on a Tax Schedule report.

Loan Account

If there is a loan on the vehicle, the payout can be transferred to the loan account.

Savings/Checking Account

The payout can be deposited into a savings or checking account, with the account then being used as the category.

Asset Account

An asset account can be set up for the vehicle to track its assets, and the payout can be transferred to this account.

Creating an insurance reimbursement account

To create an insurance reimbursement account in Quicken, you can set up an "Insurance Reimbursement Account" as an offline Asset or Checking account. This will allow you to record any repair bills or expenses as transfers from your Checking or Credit Card account to the Reimbursement account.

• Create the Insurance Reimbursement Account: Set up a new account in Quicken and name it "Insurance Reimbursement Account". You can choose to set this up as either an offline Asset account or a Checking account, depending on your preference.
• Record Repair Bills or Expenses: When you receive a bill for repairs or expenses that will be covered by insurance, record these transactions as transfers from your Checking or Credit Card account to the Insurance Reimbursement Account. If you know that the insurance will only cover a certain percentage of the total expense, you can record a split transaction. For example, if the insurance covers 70% of the expense, record 70% as a transfer to the Insurance Reimbursement Account and the remaining 30% as an expense in the appropriate category.
• Record Insurance Reimbursement Payments: When you receive reimbursement payments from the insurance company, deposit these amounts into your Checking account and record them as transfers to the Insurance Reimbursement Account. This will offset the balance in the Insurance Reimbursement Account.
• Balance the Account: Continue to record insurance reimbursement payments until you have received all the money the insurance company is willing to provide. Eventually, the balance in the Insurance Reimbursement Account should reach zero, indicating that all expenses have been reimbursed.

By using an Insurance Reimbursement Account, you can accurately track and manage your expenses and insurance reimbursements, ensuring that you properly account for all transactions related to a specific incident or event. This method provides a clear picture of your financial situation and helps you reconcile any discrepancies between expenses and reimbursements.

Tracking insurance reimbursements

Using a Category

Create a dedicated category specifically for insurance reimbursements. This can be done for both employer reimbursements and medical expense reimbursements. By using a category, you can easily track and manage these transactions. When depositing the reimbursement check, categorise it into the same category to reduce the accumulated amount. This approach ensures that the reimbursement offsets the initial expense.

Using an Account

Instead of a category, you can create an account for better visibility and tracking of transactions. This method is especially useful for employer reimbursements. You can record expenses into this account from your checking, credit card, or cash accounts. When you receive a reimbursement, deposit it into the same account, ensuring that you regularly mark these transactions as "Reconciled" to maintain accurate records.

Using a Transfer

For employer reimbursements, you can treat the reimbursement as a transfer between accounts. When you incur an expense, record it in your credit card or cash account, and instead of using a category, transfer it to the designated reimbursement account. When you receive the reimbursement, deposit it into your checking account and categorise it as a transfer to the reimbursement account.

Using a Split Transaction

In certain cases, such as medical expense reimbursements, you may need to use a split transaction to accurately track the reimbursement. When you receive the reimbursement, deposit it into your checking account, and create a split transaction that includes a transfer to the reimbursement account and the appropriate category for the reimbursed expense. This approach ensures that the reimbursement offsets the original expense while also reducing the balance in the reimbursement account.

Using an Adjustment Category

In some cases, you may want to categorise an insurance payout or reimbursement as an "Adjustment". This is one of Quicken's special categories, which prevents the transaction from appearing as income or expense in your reports. This can be useful if you don't want the reimbursement to impact your tax schedule report.

Remember, the methods outlined above provide a general framework for tracking insurance reimbursements. Depending on your specific situation, you may need to adapt these methods or combine them to suit your needs.

Using the 'adjustment' category

The "Adjustment" category is a special category created by Quicken that is neither income nor expense. It is used for transactions that do not fall into the typical income or expense categories, such as reimbursements or insurance payouts. For example, if you receive a check from your insurance company for a totaled vehicle and are not replacing it, you can use the "Adjustment" category to record this transaction without it showing up as income or expense in your reports.

To use the "Adjustment" category, you can follow these steps:

• Open the Quicken mobile app and navigate to the transaction you want to categorize as an adjustment.
• Select the category field for that transaction.
• Choose "Adjustment" as the category.
• Save the transaction.

Using the "Adjustment" category will help you keep your income and expense totals consistent across your Quicken desktop and mobile app. It is a useful tool for categorizing one-off transactions that do not fit neatly into other categories.

It is worth noting that the "Adjustment" category is different from creating a "fake transfer" or a "one-sided entry." A "fake transfer" involves using the syntax of transferring money between accounts but transferring it to the same account, effectively changing the balance without affecting any other account or category. This can be useful in certain scenarios, but it is different from using the "Adjustment" category, which is a designated category within Quicken.

Frequently asked questions