What is the ruling on financial compensation received from a non-Islamic insurance company after a car accident, and is Zakat obligatory on it, given the urgent need for this money to pay off debts?

The mandatory car insurance contract is invalid, and the insured is only entitled to what he paid. Therefore, ask the insured about the amount he paid for the insurance and take that much, then ask him to complete your right from his lawful money, explaining to him that he is not entitled to more from the insurance than he paid. If he refuses, we ask Allah to compensate you with something better, because the judiciary will compel you to accept what the insurance pays, which is not permissible for you to accept Islamically. If you take more from the insurance than what was paid, return the excess to it. If it refuses to take it, then spend it on general Muslim welfare. As for zakat on the money: whatever was equivalent to what he paid for the insurance is subject to zakat if it reaches the nisab and a year has passed over it. The excess over that is not subject to zakat because it is not your property.