What applies to coverage under the personal auto policy (PAP) when driving in Canada or Mexico?

The correct answer is rooted in the specifics of how the personal auto policy (PAP) deals with international driving situations, particularly in Canada and Mexico. When driving in Canada, the personal auto policy typically provides coverage because Canada's auto insurance regulations align closely with those of the United States. Thus, no additional endorsement is required for coverage when driving in Canada.

However, the coverage nuances alter when it comes to Mexico. The PAP generally offers only limited coverage in Mexico due to different insurance requirements and regulations. Therefore, a limited Mexico coverage endorsement is recommended when driving into that country. This ensures compliance with local laws and better protection for the driver.

Thus, in summary, the correct choice acknowledges that while the PAP covers driving in Canada without additional endorsements, driving in Mexico necessitates the acquisition of a specific endorsement to ensure adequate coverage and compliance with local laws, capturing the policy's intent and structure accurately.