Insurance companies want to know about all licensed household members (it does not matter if they are young or old) so they can calculate their potential risks for having you and these drivers covered by your insurance policy. When you purchase liability insurance (which every auto insurance policy has), there can be a vicarious risk assigned to the insurance company to cover all household members. Most all insurance companies will require that you either add licensed household members to the policy or exclude them. This is because as household members it is assumed they have access to your vehicles and may drive them at any time. These drivers are thus a risk/rating factor to be taken into consideration.

For example if you have a clean driving record and live alone your rates would generally be lower than if you have a clean driving record but live with drivers who have many tickets, accidents, etc on their driving records. Since they have access and likely will drive your car on occasion the insurance company is normally permitted to take into account these drivers and rate accordingly since drivers with bad driving records are more of a risk to them then just you and your clean record.

So if your brother was living with you then your insurance company would want to know, many state laws require it, and your poicy contract has it in the terms that you must inform them of licensed drivers dwelling in your household, so that they can add him as a driver to your policy and rate accordingly or exclude him. Excluding your brother from your car insurance would mean that you are not paying extra on your policy to have him as a driver and thus he is not extended any coverage by your insurance policy if he were to drive your car and be in an accident, even if it were an emergency situation.

So most insurance companies will require you to place the non-relative household member on your insurance policy as a driver if he is licensed. All licensed household members are normally required to be listed as a driver or excluded on an auto insurance policy by the insurance provider not by state laws.

If you have a licensed household member, whether a relative, roommate, etc, the insurer believes that the person will have access to your vehicle and thus is a rating factor that should be on your insurance policy. If the person really is not going to drive the insured vehicle then there should not be an issue with excluding them. Without you signing off on the exclusion the insurance company cannot really believe that a licensed household member may not drive your car. As you mentioned even with your brother, you may want to loan your car to him on occasion, and that is why your insurance company would want to put him on the policy as a driver. 

State laws differ however typically insurance companies are allowed to use classifications that reflect a possible exposure for liability on the part of the insurer, in the event that bodily injury or property damage occurs due to the operation of the vehicle by anyone in your household.

The perceived risk for non-household members by an insurance company is different and that is why you can normally let a friend that does not live with you borrow your vehicle without adding him or her to your policy.

A friend may occasionally borrow your car and be covered by your insurance because they do not have regular access to your car and thus are not rated as a risk factor on your policy. If you do have someone outside of the household that regularly drives your car then normally an insurance carrier usually would also want this person listed an occasional driver so they would be properly covered in an accident.

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