PROJECTION
The
replacement value of improvements includes an amount added to the
current value or cost of replacement to cover the delay between
destruction of the building and rebuilding. The increase in cost is a
function of size, complexity of the building and the expectation of
an increase in the cost of building.
For
insurance purposes the current replacement cost should also be
projected not only because of the delay between destruction and time
of rebuilding but because the policy will current for the next 12
months.