Question: What defines someone as a household member for car insurance purposes?
Answer: In general, an 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 by a car insurance carrier.
However, the definition of a household member can vary from one insurance company to the next depending due to different underwriting rules and guidelines that each carrier has in place, as well as the language (terms) of your auto insurance policy.
There also can be differences in state laws that help to define who is considered a household member and should be listed on, and covered by, a car insurance policy.
A policy often defines "family member" as a person living in the named insured's household who is related 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 typical 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 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, such as immediate dormitory roommates who are non-family and do not drive the vehicle and additional residents of a military barracks. Again, insurance company guidelines vary so when applying and obtaining car insurance find out directly from the insurance carrier what its specific definition of a household member or household resident is.
You need to inform insurer of all household members
For coverage purposes, all family members of driving age who are residents of the household normally must be listed. This is 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. Not telling the insurance company about a household member is misrepresentation, a form of insurance fraud.
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. Once you know state laws, compare insurance companies to see which can give you the best rates for your household.