What to check before hiring a contractor
Before you hand over money or let someone into your home, verify three things: whether they hold the licenses your state requires, whether they have active insurance, and whether past customers have complaints about them. You can do this in about an hour using free public records and review sites. Most contractors expect this — it protects both of you.
The specific licenses and insurance you need to check depend on what work you're having done and where you live. A plumber in California needs different credentials than one in Texas. A handyman doing minor repairs may not need a license at all in some states, while in others they do. Start by finding out what your state actually requires, then verify the contractor has it.
Key Takeaways
- Check your state's licensing board website to see whether the contractor holds a current, active license for the type of work they're doing.
- Verify they carry liability insurance and workers' compensation insurance by asking for a certificate of insurance and confirming it with their insurer directly.
- Search the contractor's name and business on the Better Business Bureau, Google Reviews, and your state's attorney general complaint database.
- Ask for references from recent jobs in your area and contact at least two of them to ask about the quality of work and whether the final bill matched the estimate.
How to verify a contractor's license
Every state maintains a public database of licensed contractors. Search your state's name plus "contractor license lookup" or "licensing board" to find the official site. You'll enter the contractor's name or license number and see whether their license is current, what type of work it covers, and whether there are any disciplinary actions on record.
If the contractor says they don't need a license because the job is small, verify that claim. Go to your state's licensing board website and look for the rules about what work requires a license. Some states exempt work under a certain dollar amount or certain types of repairs. If the contractor is wrong about this, that's a red flag — they either don't know the law or they're hoping you won't check.
Write down the license number and expiration date. A license that expired last month is not the same as a current one. If you can't find the contractor in the database at all, ask them directly for their license number and the date it expires, then search again. If it still doesn't show up, do not hire them.
How to check insurance coverage
Ask the contractor for a certificate of insurance — a one-page document that shows what insurance they carry, the policy numbers, and the dates the policies are active. They should be able to email this to you in minutes. If they hesitate or say they'll bring it on the first day of work, that's a warning sign.
The certificate should show two types of insurance: general liability (which covers damage they cause to your property or injury to someone on your property) and workers' compensation (which covers their employees if they're injured on the job). If they work alone and have no employees, they may not carry workers' comp, but they should still have general liability.
Don't just look at the certificate — call the insurance company's phone number on it and confirm the policy is real and currently active. Give them the policy number and ask them to verify the coverage. This takes five minutes and catches forged certificates. If the insurance company has no record of the policy, the contractor is not insured.
How to search for complaints and reviews
Start with the Better Business Bureau (bbb.org). Search for the contractor's business name and your state. The BBB shows complaints filed against them, how they responded, and their rating. A contractor with no complaints is not necessarily good — they might be new — but a pattern of unresolved complaints is a real problem.
Search Google Reviews, Yelp, and any local review sites for the contractor's name and business. Read the one-star and two-star reviews carefully. People often complain about the same thing — missed deadlines, poor communication, work that didn't match the estimate. If you see the same complaint multiple times, take it seriously.
Check your state's attorney general website for a complaint database. Most states maintain a searchable record of complaints filed against contractors. Search the contractor's name and business. If there are complaints, read what they were about and how they were resolved. Some states also maintain a list of contractors who have been sued or had judgments against them.
How to use references and past work
Ask the contractor for the names and phone numbers of three to five customers from jobs they completed in the last year, ideally in your area. Call them and ask specific questions: Did the work match what was promised? Did the final bill match the estimate? How long did the job take? Would you hire them again? Listen for hesitation or vague answers — they're often more telling than what people say directly.
If the contractor is reluctant to give references or says they can't because of privacy, that's unusual. Most contractors are proud of their work and happy to have customers vouch for them. If they push back, ask why.
If possible, ask to see photos of a recent job similar to yours. A contractor who has done the exact work you need before is lower risk than one trying it for the first time. Ask them to walk you through what they did and why.
Red flags that mean you should keep looking
Do not hire a contractor who asks for full payment upfront. Standard practice is a deposit (usually 10 to 30 percent) to start work, then payments as milestones are reached, with the final payment when the job is done. If they want all the money before they begin, you have no leverage if the work is poor or incomplete.
Be wary of contractors who pressure you to decide quickly, who won't put the estimate in writing, or who quote significantly less than other contractors without explaining why. A price that's too low often means they'll cut corners or add surprise charges later.
If a contractor can't or won't provide proof of insurance, a license number, or references, hire someone else. These are basic things any legitimate contractor should have ready to show you.
What to do once you've checked everything
Get the estimate in writing. It should describe the work in detail, list the materials that will be used, state the total cost, and include the start and end dates. Ask what happens if the job takes longer or costs more. A good estimate also says what's not included — for example, whether they'll haul away old materials or whether that's your responsibility.
Ask about the payment schedule before you sign anything. Understand when they expect payment and what triggers each payment. If they want a large deposit, ask what happens to that money if the job is cancelled.
Keep copies of everything: the license verification, the insurance certificate, the written estimate, and any emails or texts. If something goes wrong, you'll need these to file a complaint or take legal action.
Frequently Asked Questions
What if a contractor says they're licensed in another state and will get a local license later?
Don't hire them until they have the local license. Out-of-state licenses don't transfer automatically, and you have no way to know whether they meet your state's standards. If they're planning to get licensed, they should do it before taking your money.
Can I hire a contractor without a license if the job is small?
Only if your state actually exempts small jobs from licensing. Check your state's licensing board website to confirm. If the law requires a license and the contractor doesn't have one, you may not be able to file a complaint through official channels if something goes wrong, and your homeowner's insurance might not cover damage from unlicensed work.
What should I do if I find a complaint against a contractor?
Read what the complaint was about and how the contractor responded. One old complaint that was resolved is different from multiple recent complaints. If you're concerned, ask the contractor directly about it and listen to their explanation. You can also contact the person who filed the complaint and ask what happened.
Is it okay to hire a friend or family member without checking their license?
No. If they're doing work that requires a license, they should have one — for their protection and yours. If something goes wrong, you'll have a harder time getting it fixed or getting compensation. A real friend will understand why you need to verify this.
What if the contractor's insurance has expired?
Don't hire them until they renew it. If they're injured on your property or damage something while uninsured, you could be liable. Ask them to send you a new certificate of insurance before work begins.