Kansas - My wife was injured in June of 2007 in a serious automobile accident for which she received insurance settlements from both the other drivers insurance company and our own insurance company's under insured motorist provision. She is a school teacher and did not receive compensation for lost wages as the accident occured while she was on her summer vacation. I am trying to determine based on what I have read if there are any federal or state income taxes due on the settlement. The settlement was paid after all of her medical bills were paid by the insurance company or by ourselves. As I interpret the info I have read it appears these settlements would be non taxable income. Am I correct in this assumption?