Anyone who performs work on your home must be approved for contracting by the Maryland Home Improvement Commission (MHIC). The commission monitors the quality and legality of service provided by licensed contractors. If your contractor is not licensed, you are allowing an unlawful and unknown person to work on your most prized possession -- your home! Make sure you contractor has a valid MHIC number displayed prominently on all forms of advertisement, including sides of vans and business forms.

Check your contractors MHIC status now.

2. Are you insured for workman's compensation and liability?

A reputable home improvement contractor's first concern is for the safety of his employees and the security of your home. Therefore, a reliable contractor will carry insurance to protect the people who work for him and for whom he works. In the state of Maryland, all contractors must provide workman's compensation insurance for their employees. A contractor's unwillingness to pay for his workers could cost you, the homeowner; an injury to an uninsured worker on your property could make you liable to pay the bill. Many uninsured or unlicensed contractors will pay their workers "under the table" untaxed and uninsured, leaving you, the homeowner and the worker, without a safety net.

3. Do you have the financial capital to complete my job as estimated?

Some home improvement companies will depend on your down payment to finish their previous project. Many bid low to win work for their companies, then realize too late that the slightest delay or project alteration sends them into the red. Look for a company with a proven and reliable history of completing projects of similar scope to yours. Also, be skeptical of contractors who ask for more than one third down payment. One-third is the maximum down payment that can be asked of you before work begins on your home. Develop a payment schedule equal to the percentage completed. You want your contractor to stick around long enough to make your dream a reality.

4. Do you have references I can call to verify your craftsmanship?

When you are selecting a contractor to work on your home, consider how a personnel director in a company hires employees. Would she hire an applicant with no resume or verifiable work history? In the same way that a personnel director would question the applicant's former employers, you want to sample some former customers for their opinion of the contractor. Did they provide competent work? Did the workers clean the job? Are you happy with the project? Don't repeat someone else's unfortunate experience -- check references. In fact, most of a contractor's business should come from word of mouth.