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.