"was the vehicle used in a business"

It's not a vehicle issue. I looked it up. I would put it like this (very simplified):

You have a household insurance policy that either pays out replacement value to you or pays the repair. Your roof gets damaged and it is at its halfway point in useful life. The insurer chooses the worse option for the homeowner, and also, figures the labor cost is half-depreciated along with the remaining life of the roof being replaced. The loss of the existing roof might only be the remaining half-life, but labor costs what labor costs to replace or repair.

I didn't see anything that isn't taxable about it. It's settlement against the property damage. The argument was how this settlement was determined. Not what it was for.