How to check a contractor's license and insurance

There is no single national license for remodelers. Some states register construction contractors. Some license only certain trades. Some leave general remodeling to the city. Look up the rule where the house is, then check the person who would sign your contract before you pay a deposit.

What to look up, in any state

1. The legal business name, not only the name on the truck or the estimate. Search that name on the state or city site.
2. The license or registration number printed on the bid. A number on paper is not proof. Open the official record and read the status.
3. Whether the status is active, and whether the classification covers the work you are hiring them to do.
4. Complaints, bonds, and discipline if that record shows them. A clean page is not a promise of good work. A long complaint list is a reason to slow down.
5. Insurance. Ask for a certificate, then confirm it with the insurer named on the certificate, using the contact information the insurer publishes. Do not rely on a card alone.

Example: California

California's Contractors State License Board lets you search by license number, business name, or the person's name before you hire (CSLB license check). The board says advertisements, business cards, bids, and contracts must show the license number, and that seeing a number does not mean the license is valid. When someone comes to the house, CSLB says to ask for the pocket license and a photo ID, and to make sure the person matches the license. Salespeople have to be registered too (CSLB, finding a contractor).

• Workers' compensation. If the contractor has employees, California requires this coverage. Some license classifications must carry it even with no employees. CSLB says the license record shows that, and that an injured worker without coverage can leave you exposed. Ask your own insurer what your policy does and does not cover. CSLB's words, not a prediction about your policy.
• General liability. CSLB says this is not required in California, and that it is what covers damage to your property. If the contractor does not have it, ask how a loss would be paid. The board says a licensed contractor must give you information on both kinds of insurance in the written contract.
• The license bond. Licensed contractors must have a $25,000 contractor license bond. CSLB says that bond often is not enough for a large project or for several complaints at once. It is not a substitute for a contract or for liability insurance.

Example: Washington

Washington requires construction contractors to register with the Department of Labor & Industries, and state law requires them to be bonded and insured (L&I, register as a contractor). L&I's verify tool is where you check an active registration, bond and insurance, workers' comp, safety citations, and lawsuits against the bond (L&I verify). You can search by license number, business name, or owner name. Plumbing, electrical, and a few other trades have extra licensing on top of registration.

Example: a state that licenses the trade, not every remodeler

The Texas Attorney General tells homeowners that if they are hiring a kind of worker the state licenses, such as an electrician, they should contact that licensing agency to check credentials and ask about complaints. The AG names the Texas Department of Licensing and Regulation as the agency that licenses many of those trades (Texas AG). Use that pattern where you live: find out which work requires a license, then use that agency's lookup. Do not assume a general remodeler holds a state license just because the electrician on the job does.

Insurance questions that belong in the contract

• Does the certificate name the same business as the license?
• What are the effective dates, and do they cover your whole project?
• Is workers' compensation in force if anyone other than the owner will be on site?
• Is there liability coverage for damage to the house? If not, what is the plan?
• Will subcontractors carry their own coverage? Ask. A general contractor's policy does not automatically cover every sub.

If someone is hurt or something is damaged later, the steps are in contractor damaged your house. Checking now is the cheaper version of that problem.

Where RenoBinder fits

Write the legal name and the license number into the project before you accept a bid, next to the scope and the payment schedule. One room is free. Compare plans.

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