Ask Angie

Unlicensed, uninsured contractor not worth the risk

What are the risks if I hired a remodeling contractor who is not bonded or insured?

M.K., Santa Maria, Calif.

Hiring a contractor who is not bonded, insured — and licensed, if applicable — is a risk you don’t want to take.

Let’s talk about the importance of insurance first. Contractors should carry two types of insurance: liability and worker’s compensation. As a homeowner, these protect you in two ways. First, liability insurance will protect you if the contractor causes damage to your home. What if, say during an upstairs bathroom remodel, your uninsured contractor was doing work that caused the bathtub to crash through the floor? If you think your homeowner’s policy would cover you, think again. It likely won’t, unless you’ve purchased additional coverage for in-home employees.

What if the contractor had an employee who was injured on your property but the contractor didn’t carry worker’s compensation insurance? Your homeowner’s insurance policy might help cover the cost of that worker’s claim, after you meet your deductible, but that claim could result in an increase in your rates and make it more difficult for you to get insured in the future.

Bonding is often confused for insurance, but there is a notable difference. A bond is intended to act as a guarantee that the contractor will perform the work as he or she is supposed to. It is secured money that would be distributed to the homeowner in the event the contractor failed to perform as he or she should. For example, if a plumbing contractor didn’t perform a pipe repair adequately and caused a leak that went undetected and caused damage to the home. Or, if a company employee stole personal items from your home, the bond would cover that loss. Don’t take a contractor’s word that he or she is bonded. Ask for proof of the bond and be sure you understand exactly what it covers.

Finally, you want to make sure your contractor holds the appropriate licensing, if it’s needed. Check with your local licensing authority and, if applicable, ask for a copy of the license. Licensing offers proof that the contractor has met certain industry training standards and is allowed to do the work in your area. Hiring an unlicensed contractor could cost you big. If the work does not meet local building codes, or the contractor doesn’t pull the necessary permits (which an unlicensed contractor cannot do), you will be responsible for making the repairs to meet code. Allowing work to be done by an unlicensed contractor could also void your homeowner’s insurance policy, should a claim arise as a result of that work.

It might be appealing when comparing the estimate of an unlicensed, uninsured and non-bonded contractor to one who has those credentials. Licensed, bonded and insured contractors usually charge more than those who haven’t earned the credentials or paid for the insurance protection. I like to look at it this way: If a contractor doesn’t follow the law (or good business practices) in being licensed, insured or bonded, what else is he or she cutting corners on? If something goes wrong, it’s you who will be paying the price.

My advice is to save yourself the stress and risks involved with hiring cheap, unqualified help. Hire a contractor who you know has earned the proper credentials and follows good business practices. You’ll have a much better chance of seeing your job done right the first time.

Ask Angie your question at

Read more Home & Garden stories from the Miami Herald

Miami Herald

Join the

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category