Are claims received for renters insurance due to hurricane Katrina taxable?

The military paid for my losses on a depreciated schedule then sent me a 1099-misc with the insurance amount paid, on line 7. I thought section 7 was reserved for non-employee compensation, i.e. goverment contractors. Should this have been reported to the IRS on a 1099-misc? Isn’t this considered a casualty loss? I didn’t think that this payout was a taxable item because we have to replace all items that were lost, also we are not in a better position prior to the hurricane, if anything, WORSE!

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