Maryland Foundation Repair Contractor License Exam Practice Questions And Correct Answers (Verified Answers) Plus Rationale 2026 Q&A| Instant Download Pdf GRADED A+

Maryland Foundation Repair
Contractor License Exam Practice
Questions And Correct Answers
(Verified Answers) Plus Rationale
2026 Q&A| Instant Download Pdf
GRADED A+

1. According to Maryland law, what is the primary requirement
regarding an MHIC license for foundation repair on a residential
property?

 A) Only required if the contract exceeds $500.
 B) Required for any paid home improvement work, regardless of the
contract amount.
 C) Not required if you are working as a subcontractor.
 D) Only required if the project involves structural changes.
 Answer: B.
 Rationale: Work on foundations is explicitly included in the legal definition
of "home improvement". Under Maryland Business Regulation Article §8-
301, a license is required for any person who performs home improvement
work for compensation, and there is no minimum contract amount for
licensing to be required. Any paid foundation repair work falls under this
mandate.

2. What is the current minimum general liability insurance requirement
for a licensed MHIC contractor, effective June 1, 2024?

 A) $50,000 for property damage and $100,000 for bodily injury.
 B) $200,000 combined single limit.

, C) At least $500,000.
 D) $1,000,000.
 Answer: C.
 Rationale: As of June 1, 2024, Maryland law requires all home
improvement contractors to maintain a general liability insurance policy
with a minimum coverage of $500,000.

3. What must a contractor do to legally enter into a contract with a
homeowner for a foundation repair project?

 A) Have a valid MHIC license and ensure the contract is in writing.
 B) Provide a verbal estimate and start work immediately.
 C) Register their business with the county only.
 D) Have a contractor's state trade license.
 Answer: A.
 Rationale: Only a contractor with a valid MHIC license can enter into a
contract with a homeowner for home improvement work. Furthermore, a
written contract is a legal requirement for home improvement projects that
exceed a certain amount (often $500 or more) and to ensure consumer
protection.

4. If a licensed contractor fails to complete a foundation repair project
and the homeowner obtains a court judgment against them, what is
the maximum compensation the homeowner can recover from the
MHIC Guaranty Fund?

 A) The full amount of the contract, up to $30,000.
 B) Up to $20,000.
 C) Up to $50,000.
 D) The bond amount, which is a maximum of $10,000.
 Answer: A.
 Rationale: The MHIC Guaranty Fund exists to compensate homeowners for
losses caused by licensed contractors, up to the amount paid to the
contractor, with a statutory cap of $30,000 per claim.

, 5. An unlicensed individual performs foundation repair work in
Maryland. What is a significant legal consequence for this individual?

 A) They may be subject to a fine but can still enforce the contract in court.
 B) They are committing a misdemeanor and cannot enforce any contract in
Maryland courts.
 C) They only need to pay a small administrative fee.
 D) They are protected from legal action by the "right to work" law.
 Answer: B.
 Rationale: Performing home improvement work without an MHIC license is
a misdemeanor under Maryland law. Most critically, an unlicensed
contractor cannot enforce a home improvement contract in Maryland
courts, meaning they cannot sue the homeowner to recover payment for
their work.

6. Which agency is responsible for administering the MHIC licensing
exam?

 A) Maryland Department of the Environment (MDE).
 B) The Maryland Home Improvement Commission (MHIC) directly.
 C) PSI Examination Services.
 D) The Maryland State Board of Master Electricians.
 Answer: C.
 Rationale: The MHIC exam is administered by a third-party testing
provider, PSI Examination Services, under contract with the Commission.

7. What does a performance bond guarantee for a homeowner?

 A) The contractor will complete the contract according to its terms.
 B) The contractor will provide the lowest bid.
 C) The contractor's personal income is insured.
 D) All materials used will be free.
 Answer: A.
 Rationale: A performance bond is a financial guarantee that the contractor
will fulfill all contractual obligations and complete the project according to
the terms and specifications agreed upon.

, 8. During a foundation waterproofing project, a trench is excavated. At
what depth does OSHA generally require fall protection or protective
systems?

 A) 3 feet
 B) 4 feet
 C) 5 feet
 D) 6 feet
 Answer: C.
 Rationale: Under OSHA regulations, any excavation 5 feet or deeper must
have a protective system in place (such as shielding, shoring, or sloping) to
prevent cave-ins, unless the excavation is in stable rock. While fall
protection is required at 6 feet on a general residential site, the specific
standard for trenching is 5 feet.

9. What is the most important reason for soil classification before
excavation work?

 A) To determine the color for landscaping purposes.
 B) To understand soil stability and determine the necessary shoring or
shielding needs.
 C) To estimate landscaping costs accurately.
 D) To check for the presence of worms.
 Answer: B.
 Rationale: Classifying soil is critical for safety as it helps determine the type
of protective system needed to prevent cave-ins, a major cause of fatalities
and injuries in excavation work.

10. For a contractor with one or more employees, what insurance is
required by Maryland law?

 A) Only general liability.
 B) Life insurance.
 C) Workers' compensation insurance.
 D) Title insurance.
 Answer: C.