Choosing a Contractor: What Actually Matters
Why this matters
Most bad contractor experiences are not about skill. They are about what happened when something went wrong: a crew that stopped answering the phone after the deposit, a leak after the job that nobody would come back for, a worker injured on your property with no insurance behind him, a failed inspection on a permit that turned out to be in your name. A handful of plain questions, asked before you sign, sort out most of that.
This card is about choosing the shop. Reading what they hand you is covered elsewhere: see related How to Read a Contractor's Estimate and Comparing Estimates That Do Not Match.
License: what it tells you, and where it applies
What a license is. In many trades and places, the state or local government requires a contractor to hold a license before doing certain work. Getting one usually means showing experience, passing an exam on the trade and its codes, and sometimes posting a bond or proving insurance. Keeping it means there is somewhere to complain that can actually take action.
Where it applies varies a lot. Electrical and plumbing work is licensed statewide in most states. Heating and air conditioning is licensed statewide in many. General contracting, roofing, remodeling and handyman work vary widely: some states license nearly all of it above a small job size, some leave it to cities and counties, and some require only a registration that involves no exam. Texas, for example, licenses electricians, plumbers and air conditioning contractors statewide but has no statewide license for general contractors or roofers. California, at the other end, requires a state contractor's license for most work above a modest job size. Look up your own state's contractor licensing board, and your city's, for the trade you are hiring.
What it does not tell you. A license says the business met a minimum standard and is allowed to do the work. It does not say the business is good, prompt or fairly priced. It is the floor, not the decision.
Match the license to the job. A general contractor's license may not cover electrical or gas work, which usually needs its own licensed trade. Ask who will do each part and what license each holds.
Insurance: who pays when something goes wrong on your property
General liability insurance covers damage the contractor causes to your property or to other people: the ladder through the window, the water damage from a fitting that let go.
Workers' compensation insurance covers their workers' injuries. It matters to you because a worker hurt on your property who has no workers' comp may look elsewhere for medical costs, and depending on your state, that can include a claim involving you or your homeowner's policy. States differ on which businesses must carry it, and some exempt very small employers or owner-only businesses, so "we don't need it" may be true and still leave a gap. If the crew is more than the owner, ask how their injuries are covered.
The proof is a certificate from their insurance agent, not a photo of a card. The steps for checking both license and insurance are in How to Check a Contractor's License and Insurance.
The scope in writing, with the permit named
A written scope says what will be done, with what materials, and what is not included. "Replace water heater" is a start. "Remove and dispose of existing 50-gallon gas water heater; install new 50-gallon gas water heater; new flexible gas connector, relief valve discharge line and vent connector as required; haul away old unit; permit and final inspection included" is a scope.
The exclusions matter as much as the inclusions. "Drywall repair by others" or "does not include electrical" tells you what you will still have to arrange.
The permit named. If the work needs a permit in your area, the proposal should say who pulls it and that the final inspection is included. A licensed contractor normally pulls the permit in their own name. Being asked to pull it yourself is a question worth asking about. See related: What a Permit Means for You as the Homeowner.
Timeline and payment terms belong in writing too. See related: Deposits, Payment Schedules and Lien Waivers for Homeowners.
Past customers with work like yours
Ask for two or three recent customers with a similar job. A shop that does excellent bathroom remodels may never have replaced a roof. "Recent" means within the last year or so, and "similar" means the same kind of work at about the same size.
Questions worth asking a reference:
- Did they show up when they said, and finish when they said?
- Was the final bill what the written price said, and if not, how were changes handled?
- Did anything go wrong, and what did they do about it?
- Would you hire them again for the same job?
The third question tells you more than the other three. Every contractor has jobs where something goes wrong; what you want to hear is that they came back.
Online reviews are worth reading for patterns, especially how the company answers complaints, more than for the star average.
How they handle problems
This is the most useful question to ask the contractor directly, and few people ask it.
- "If something isn't right after you finish, what happens?" Listen for a named process: call this number, someone comes back within a stated time.
- "What does your warranty cover, and for how long?" Labor and parts are often warranted separately and for different periods, and the equipment maker's warranty is a third thing. Get it in writing.
- "Who do I call if the person I've been dealing with is not available?" A business with one phone number and one person may be fine, but you should know.
A clear, unbothered answer to these is a good sign. A vague one is not a disqualifier, but it is information.
Red flags, and why each one matters
| Red flag | Why it matters |
|---|---|
| Cash only, or a large cash deposit | No record of payment, and often no business account behind the company |
| Knocking on doors after a storm | Out-of-area crews often follow storms and leave before warranty problems show up |
| Pressure to sign today, "price is only good now" | Gives you no time to check license, insurance or references |
| No business address, only a cell number | No way to find them if something goes wrong later |
| Asks you to pull the permit, or says none is needed without checking | May not be licensed, or may not intend to have the work inspected |
| Offers to "cover" your insurance deductible | Illegal in some states, and a sign the claim may be inflated |
| Asks you to sign your insurance claim over to them | Gives them control of the claim; some states restrict it; ask your agent first |
| Will not give a written scope | Nothing to hold them to |
On the deductible point: several states, Texas and Colorado among them, in substance make it unlawful for a roofing contractor to waive, absorb or rebate a homeowner's insurance deductible. Check your own state's rule, and if a contractor offers it, treat it as a reason to keep looking.
Worked example: a roof after a hailstorm
The setup. A spring hailstorm damages a homeowner's roof. Their insurance adjuster confirms a claim. Within a week, three contractors are in the picture.
Contractor D knocked on the door the morning after the storm. Friendly and knowledgeable. Truck plates from another state, a cell number, no local address. Offered to inspect the roof for free, then said they could "take care of the deductible" and asked the homeowner to sign a form letting them deal with the insurance company directly. Said they had a crew available this week only.
Contractor E was recommended by a neighbor whose roof they replaced two years ago. Local office address, a website with the license number on it. The written proposal listed the shingle line, underlayment, flashing replacement at the chimney, removal and disposal, the permit, and a 5-year workmanship warranty in addition to the shingle maker's warranty. Start date in about three weeks.
Contractor F found online. Local address, license number provided. Proposal was a single line: "Replace roof per insurance scope." When asked about permits, said "we usually don't bother on reroofs." Could start in one week.
Working through it.
| Question | D | E | F |
|---|---|---|---|
| State or local license for roofing (where required) | Not provided | Provided, checked | Provided, checked |
| Liability and workers' comp certificate | Not offered | Sent by agent | Sent by agent |
| Written scope with exclusions | No | Yes | One line |
| Permit named | Not mentioned | Included | "Usually don't" |
| References for similar work | None local | Neighbor, plus two more | Two, both siding jobs |
| Problem handling stated | No | 5-year workmanship, office number | "Call me" |
| Red flags | Deductible, sign-over, today only, no address | None | No permit |
The decision. D was out on the deductible offer and the claim sign-over alone, before any other question. F was licensed and insured, which is real, but the one-line scope gave the homeowner nothing to hold them to, the permit answer was a problem in a city that requires reroof permits, and neither reference was a roof. E waited three weeks longer than F and was chosen.
What the homeowner did not let decide it. Start date. A week's delay on a roof that is not leaking is a small cost against a crew with no warranty behind it. If the roof had been actively leaking into the house, the right move would have been a temporary tarp from a contractor now and the full replacement decision afterward, not signing D's form to get a fast start.
What would have changed the answer. If F had come back with a full written scope, a permit and one reference for a roof, the choice between E and F would have been close, and it would have come down to the warranty terms and which one the homeowner trusted to come back.
References
- Your state's contractor licensing board, and your city or county's, for which trades require a license where you live
- Your homeowner's insurance agent, for questions about deductibles and assigning a claim
- See related: How to Check a Contractor's License and Insurance
- See related: How to Read a Contractor's Estimate
- See related: What a Permit Means for You as the Homeowner