Does being unemployed affect car insurance?

Use the description that is true

Unemployed, retired, student, homemaker and not working because of another circumstance are not interchangeable descriptions. Quotation systems often provide several options, and you should choose the one that genuinely describes your position.

Do not keep an old occupation after things change. If you leave a job during a policy, check whether your insurer requires you to report the change straight away. Continuing to describe yourself as doing work you no longer do can create a discrepancy later.

Price differences are not a reason to change the answer

Occupation can affect premiums, sometimes noticeably. Try alternative truthful descriptions only where more than one genuinely applies and the insurer’s wording allows it; do not invent a job title.

Your use of the car may also change

If you're no longer commuting, your mileage or class of use may be different. That can be relevant too, but it should be updated accurately rather than assumed.

Shop around carefully. Different insurers place different weight on occupation. A higher quote from one company does not mean the same result everywhere, so comparison can still be worthwhile.