Your car insurer is one of the first people you should notify when you lose your job. Being unemployed doesn't automatically affect your insurance rates, but it may bring some changes that will influence your insurance premiums. Here are three examples of things that may change when you lose your job:

Your mileage

Your driving behavior is likely to change when you lose a job; depending on your circumstances, your mileage can either hike or reduce. On the one hand, your mileage can increase if you are actively looking for a job, going for interviews, or engaging in a side business that involves lots of traveling. On the other hand, your mileage can reduce if you were previously using your car to commute to work, and now you are mostly staying at home.

Insurers have different approaches depending on what they believe you are likely to do. For example, your rates will hike if you are now driving more and fall if you are mostly using your car for small errands after losing your job.

Your Risk of Filing a Claim

Another thing that your employment may affect is your likelihood of filing a claim. Most people pay for small accidents out of their pockets, especially for accidents that don't involve other vehicles or people. The main fear here is that reporting too many accidents may increase insurance rates.

However, you may not be as cautious with your claims when you lose your main source of income. Your insurer may increase your rates if its analysis reveals that you are likely to file a claim for every fender bender you may experience.

Change in Credit Rating

A change in your employment status may also affect your credit status. The change may not be immediate, but it will be there the more you stay without a steady source of income. For example, you may find it difficult to pay your bills on time or service your loans.

Unfortunately, your credit scoring is one of the factors that affect your insurance premiums. Therefore, if you stay unemployed for long, your rates may increase the next time you are renewing your coverage.

Unemployment will not increase your premiums too much if you take the right precautions. For example, you can reduce the number of cars you own (if you have multiple cars), keep your mileage minimum, and reduce your coverage. Consult your agent for more information on minimizing the effect of unemployment on your insurance rates. For more information, visit websites like http://www.village-insurance.com.