1. Assess driver risk: This is the primary reason. Insurance companies need to consider the driving histories and demographics of all potential drivers who have access to your car to accurately assess the risk associated with your policy. This includes young drivers, who generally have higher premiums due to their inexperience.
2. PIP coverage (personal injury protection): As you mentioned, PIP coverage under your auto policy can extend to household members. To ensure they collect enough premium to cover potential PIP claims, insurance companies need to know who resides in your household.
It’s essential to provide accurate information about all household members who might have access to your car, as this helps insurance companies provide you with the appropriate coverage and pricing.