The 4 Risk Characteristics That Determine Your Property Insurance Premiums  

MARCH 3, 2026

Most companies provide limited property data to insurance agents, leading underwriters to make assumptions about the construction characteristics of the company’s buildings and how they are protected from losses. Adding further complexity, most insurance companies use third-party data sources and modeling tools to gather and evaluate property exposures — or insurance agents simply roll over property data each year at renewal, providing underwriters outdated information that can increase the cost of insurance, and even compromise coverage in the event of a loss.

Conducting regular, thorough reviews of property data ensures accurate pricing and reduces the chances of having an uncovered claim. 

The four property characteristics underwriters use to evaluate a risk and determine property rates are construction, occupancy, protection, and exposure — otherwise known as COPE. Inaccuracies in any one of these can result in increased premiums by as much as 25%.

C — Construction: Materials used to construct a building, including its roof, play a significant role in determining property premiums.

O — Occupancy: Occupancy hazards such as work performed, materials stored, and how you manage those hazards, impact how underwriters see a risk and affect your premium.

P — Protection: This refers to the measures used to protect the property from damage. Your insurance company looks at things like cameras, alarm systems, gates, fences, and guard stations. It also considers sprinkler systems and fire extinguishers, as well as distance to the nearest fire station and fire hydrants — all of which contribute to the property’s protection class rating.

E — Exposure: The exposure to geographic hazards — hurricanes, tornadoes, wildfires, earthquakes, and flood zones, as well as high-crime areas and the nature of neighboring businesses — plays a significant role in the likelihood of a loss. These exposures have a major influence on the perceived level of risk — and your premium costs.

In the absence of complete underwriting data from property owners and their insurance agents, insurance companies use third-party data sources and modeling tools to gather and evaluate property exposures. When this occurs, businesses usually end up paying higher insurance costs.

USI Insurance Services understands the complexities of COPE and can identify and provide accurate property data that helps with claim resolutions, reduction of premiums, and negotiating the coverage for a business’s specific risks.