Under Michigan Act 299, a contractor's license is suspended for failure to maintain required insurance. What is the standard reinstatement fee after correcting the deficiency?
Correct Answer
A) $150
Michigan Act 299 establishes a $150 reinstatement fee for licenses suspended due to insurance deficiencies once the contractor provides proof of required coverage.
Why This Is the Correct Answer
Michigan Act 299 establishes a $150 reinstatement fee for licenses that have been suspended due to failure to maintain required insurance coverage. Once the contractor provides proof of reinstated, compliant insurance, they pay this $150 administrative fee to restore their license to active status.
Why the Other Options Are Wrong
Option B: $200
$200 is higher than the fee established by Act 299 for this specific suspension reason. This may be confused with other fee schedules or penalty amounts within the licensing system.
Option C: $100
$100 is below the statutory reinstatement fee. This amount may seem reasonable but does not match the $150 fee established in Act 299.
Option D: $50
$50 is far too low and does not match any Act 299 reinstatement fee. This amount would be insufficient as a deterrent for allowing required insurance to lapse.
Memory Technique
Remember '$150 to re-license after insurance lapse.' You can think of it as: one and a half hundred dollars — $150. It is between the 'too cheap' answer ($100) and the 'too expensive' answer ($200). Michigan charges a middle-ground fee for insurance-related suspensions.
More Michigan Questions
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What is the minimum general liability insurance coverage amount required for Michigan residential builders?
Under Michigan Act 299, what is the consequence for a contractor who performs work outside the scope of their license classification?
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Under Michigan Act 299, what happens if a contractor continues to work without a valid license after it expires?
Which of the following best describes the 'pay when paid' clause limitation under Michigan law?
A project has total costs of $180,000 including $75,000 labor and $105,000 materials. With workers compensation at 7.8% of labor costs and general liability at 0.4% of total costs, what are the combined insurance costs?
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