Let’s face it, you don’t suddenly wake up and decide to renovate your home. It’s a decision that, for most of us, takes months or even years to make, not to mention the time it takes to assemble all the necessary resources. And even then, it is not a guarantee that your proposed budget will be the actual budget as unforeseen costs, and situations can occur and leave you with a massive bill.

When faced with a bloated budget, you may be tempted to review your choice of suppliers and contractors as you seek the lowest quotes. However, when it comes to construction projects, short term savings almost always translate to long term losses. Hiring a cheap, unlicensed contractor, for instance, will potentially lead to shoddy work, which may necessitate more renovations in the future.

Hiring a licensed contractor for your projects not only safeguards your investment, but also assures you of satisfaction with the final look. If you don’t know where to start your search, check out Sweeten, a renowned renovation matchmaker for a list of credible, licensed general contractors around your locality. While qualifications and certifications vary across different states, a licensed contractor will most likely have:

  • Insurance cover
  • A valid contractor’s license bond, or surety bond
  • Clean criminal record
  • A pass in a contractor’s examination

What Type of Projects Require a Licensed General Contractor?

Notably, you may get away with working with a cheapskate contractor on small projects, such as refashioning your chicken coop but not for the more complex projects. And no, it’s not all about choice. Most states mandate property owners to work with approved contractors on certain projects, so you may want to check out the guidelines given by your state or local building departments before drawing your budget.

Examples of States that have laws in this regards include:

  • California, where property owners are required to hire licensed general contractors for any project with a budget above $500.
  • New York, where a contractor must have a license to carry out projects involving basement conversions, wall additions and demolitions, and kitchen and bathroom rebuilds.

On average, most jurisdictions also require special licenses for technicians in electrical and plumbing trades even if they’re working as a subcontractor. And while the fines for breaking these laws may be punitive, you stand to lose a lot more by engaging an unscrupulous contractor.

Why Go For Licensed Contractors?

We’ve already touched on reasons why you should avoid unlicensed contractors. This section now covers the benefits of hiring a verified contractor, which include:

They Come With Insurance

Yes, your home policy will pick the tab for a wide range of accidents but most insurers can get shady when it comes to covering losses arising from renovations. Picture this; after undertaking a kitchen remodeling project, you notice that one of the pipes was badly installed and the ensuing leakage has caused some damage to the wall. When you approach your insurance company, they agree to cover the damage to the wall but leave it to you to fix the poor installation.

Now, what if your contractor, or one of their staff get injured when working at your home? Yep, you get sued!

To protect homeowners from these types of situations, most states require general contractors to carry two types of insurance policies as a prerequisite to getting a license. These are:

  • General Liability Insurance – Which covers the contractor, and by extension the property owner, from lawsuits involving accidents or injury to third parties. For example, if you have a driveway renovation and some ballast from the contractor’s machines damages your neighbor’s window, you won’t have to compensate them.
  • Workers Compensation – This typically covers both you and your contractor from lawsuits arising from workplace injuries suffered by the contractor’s staff while working in your home.


They Are Usually Bonded

In most states, registered contractors are required to regularly contribute to a pool of money called a bond, which is used to reimburse clients for damages and incomplete work when their insurance companies refuse to. Bonding as a concept is identical to insurance as it involves the insured (contractors) paying a fraction of the underlying bond amount to a third party, who then agrees to pay out the whole bond amount in case the anticipated situations arise.

They Are Most Likely to Be ‘Clean’

Most states conduct background checks before approving contractor licenses, which technically means that you can at least trust the person who shows up at your doorstep. Notably, some states may allow a person with criminal records to acquire a contractor license if they weren’t involved in major crimes and have shown proof of changed behavior, in which case you still won’t have much to worry about. 

They Have Taken and Passed a Relevant Examination

In addition to all other requirements, all states require that applicants for a contractor’s license sit and pass a written exam before getting certified. Of course, the scope and difficulty of the exams vary from state to state. In New York, for example, one needs to do a single exam that contains 30 questions, mainly covering the city’s construction laws and best practices. To pass, candidates must get 21 of the questions right.

Verifying a Contractor’s License

Contractor licensing requirements across the United States are so diverse, you are likely to get lost trying to understand them. However, all licensed contractors have a Home Improvement Contractor’s (HIC) number, which should be the first thing you ask of a prospective contractor. Secondly, major states like New York and California have online search tools where you can verify one’s credentials. 


Subscribe To Our Newsletter