Yes, they do, and I am a 'living' proof.
Well, it goes like this. We guys decided to go on a trip to Sanchi and Raisen last Saturday. There were 10 of us, on 5 bikes. As you can imagine, we had a load of fun. It was past 6 'o clock when we decided that we had had enough and needed to return.
I ended up riding pillion behind Gautam, on his famous bike with no suspension. Around fifty kms from the city, Gautam realizes that there are too many vehicles coming in on high beam to keep the helmet visor on; and too many bugs flying around to keep it up. So he hands me the helmet and I hand him my sunglasses. I am too tired to hold the helmet in my hands and put it on.
The road ahead is dark in the fading lights (plus Gautam's sunglasses!). Suddenly, there are two cycles loaded high with bags of junk right on the middle of the road, and all we can do is hit them full on at 60 kmph. I have had accidents before, more than my fair share, in fact. But never one like this. I fly off and roll several times before coming to a stop in the bushes. And all the while, I was very conscious, the adrenelene kicking and all that. I probably mustn't say this, but it was awesome, at least until the pain kicked in.
All in all, there were some ugly bruises in the right arm and the knees. Then I checked my helmet, and it turned out, there was an uglier scar right through it. Well, that scar could've been on my head. So this is serious, even the pillion rider needs a helmet. You never know when your luck runs out.

p.s. Gautam is OK as well. Was stitched up in places, but is still moving.