Which statement best describes primary insurance in the context of the PAP?

The statement that best describes primary insurance in the context of the Personal Auto Policy (PAP) is that it involves coverage for cars owned by the insured. Primary insurance typically provides the main form of coverage when a loss occurs, and under the PAP, this coverage is specifically designed for vehicles that are owned by the insured. This is fundamental in understanding how personal auto insurance operates, as it establishes the primary source of coverage for the insured's vehicles.

Other options present scenarios regarding vehicles that may not fall under the core definition of primary coverage as defined in the PAP. While the policy may have provisions for vehicles the insured drives occasionally or for leased vehicles, these situations typically involve secondary or additional coverage elements, rather than primary coverage. Similarly, while rental cars may be covered under certain conditions, stating that they are included "under all circumstances" does not accurately reflect the limitations often set within the personal auto policy. Therefore, the accuracy and clarity of the first statement make it the most appropriate description of primary insurance in the context of the PAP.