What do I do with the insurance contract reimbursement on my 1098-T?

The insurance contract reimbursement in Box 10 of your 1098-T should already have reduced the tuition amounts reported in Box 1 of your 1098-T. So in most cases, that amount is informational only and you don't need to do anything else with it.

In the rare situation where the school reporting your 1098-T did not correctly reduce Box 1, you can add the amount shown in Box 10 to the amount shown in Box 5 for scholarships or grants. This will have the effect of reducing the amount of tuition eligible for the education credit or deduction.