The definition of a household member for auto insurance companies can vary from one insurance company to another depending upon the underwriting guidelines of insurance companies. Also state laws and the language (terms) of an auto insurance policy help to define who is a household member that must be listed on a car insurance application. In general though, immediate or extended family that lives with you as well as non-family household members that drive your vehicle, such as a roommate can be considered a member of your household.
A policy often defines "family member" as a person living in the named insured's household who is related to him by blood, marriage, or adoption. So family members for insurance purposes may include any immediate or extended family member of driving age such as parents, children, siblings, grandparents, aunts, uncles, cousins, foster children, in-laws and step family members. There may be some variations in this list among different carriers as well.
A typically insurance policy may define a resident or household member as someone who has physical presence in your household with the intention to continue living there. Unmarried dependent children, while temporarily away from home, to attend college for example, are normally still considered residents or household members if they intend to continue to live in the parent's household during breaks, etc and use their parent's home address as their permanent address.
Household residents that may not need to be listed include non-family household residents who do not drive the vehicle, immediate dormitory roommates who are non-family and do not drive the vehicle and additional residents of a military barracks need not be listed as drivers. Again insurance company guidelines vary so when applying and obtaining insurance find out from the insurance carrier their specific definition of a household member or household resident.
For coverage purposes, all family members of driving age who are residents of the household in general must be listed to protect both you and the insurance company providing you with coverage. A person not related to you but dwells in your household, such as a roommate, may be required to be listed on your auto insurance policy depending upon your insurer's underwriting guidelines. In some states, exclusions are available for family residents or household members who do not require coverage.
Since a policy normally provides coverage for the named insured and other drivers who live in the same household, an insurer will request information (on the application) on such other drivers from a prospective insured when considering his request for insurance. During its underwriting process, an insurer assesses the risk presented and determines whether it wants to write that risk (meaning issue a policy). If an insurance provider decides that it is willing to write the risk, it calculates the premium to be charged for the policy.
Other drivers living in the household impacts the insurer's underwriting evaluation. The insurer needs to know how the vehicle to be insured will be used before deciding to issue a policy. For example, if a driver in the household has a poor driving record, the insurer may not want to issue the policy or issue the policy with an increased premium or instead issue the policy with a "named driver exclusion," which excludes coverage if the particular driver uses the vehicle. Whether the other driver owns and insures his own vehicle may also impact the insurers' risk evaluation
A general principle in insurance law is that an applicant for insurance has a duty to disclose to the insurer all facts material to the risk the insurance company is taking on. A material fact is one that would influence the insurer's decision on whether to issue the policy at all or issue it only for a certain premium. A person makes a misrepresentation when he makes an inaccurate disclosure.
The Connecticut insurance regulator notes that under common law insurance principles, if an auto insurance applicant knowingly makes a statement that is (1) untrue or misleading, (2) material to the risk, and (3) relied upon by the insurer in agreeing to issue the policy at a certain premium, the insurer may void the policy or deny claim payment, asserting a misrepresentation. Misrepresentation is considered insurance fraud in most states.
Basically what this information and general insurance law is saying is that the insurance company has the right to ask about all licensed household members since typically state laws allow the insurance company to be exposed to any costs that may arise from the actions of any household member and thus they want to know about all these people so they can properly assess their risk and calculate your rates based on this (as well as other rating factors).
If you have a household member that you do not want to be on your policy and they will not be driving your vehicle than if state laws and the insurance company's guidelines allow you may be able to exclude the person from the policy. However your insurance company still needs to be aware of them as a household member so that they can be specifically included or excluded from your policy. If a person is excluded from your car insurance policy this means that they will not have any coverage extended to them, even if they are driving your vehicle in an emergency situation.
You can see if your state laws have defined a household member for insurance companies or if it is up to the individual insurance company to do this internally by contacting your state's insurance regulator. To get instant car insurance quotes, click here.