The parents of my SIL have leased a car, she is 22 and has taken it out of state with my 20 yr old brother. Her parents don't approve and have threatened to report the car stolen. Would their daughter also get arrested if the car was found to have both in it? She is insured as a driver.

She would be arrested for being in the car. The whole thing would then be sorted out at the police station. Once she proved the car is owned by her parents the charges would probably be dropped. In addition the parents might get in trouble for filing a false police report.