Insurance payout taxable?

No, this would not be considered taxable income since you did not have a gain on the disposal of the vehicle.  

However, if you ended up with a loss on your vehicle, you may be able to claim it as a business loss.  To determine if you have a loss on the vehicle, you would enter it into TurboTax as a vehicle expense.  You will treat this as a sale of a vehicle.  Walk through and enter your vehicle information, you will be asked about the vehicle cost, prior depreciation and the sale price (which would be the $7,000 you received from the insurance company).  TurboTax will then tell you if you have a loss on the vehicle. 

Where do I enter my self-employment business expenses, like home office, vehicle mileage, and supplies?