Licensed Vs. Unlicensed Contractor
Why is it more to hire a licensed contractor?
Is hiring a licensed contractor really worth the extra cost?
I get it, we all want affordability when hiring a service company for our homes, but why is it more to hire a licensed contractor? Before you trust your home to that guy you ran into who knows a buddy that can do it for less, you should know what that “savings” is really costing you. Let’s start with what you get whenever you hire a service contractor that has a Registrar of Contractors License in Arizona.
- Licensed contractors carry mandatory insurance. Did you know that if you hire someone to do work in your home and they are not insured and something happens….you’re left with the bill? The average cost of a water damage claim in Arizona is over $7000.00! Part of the price to hire a licensed contractor is that we are insured to cover anything that might happen, and while licensed contractors take extreme care to do the job right, errors can happen and your licensed contractor is insured in case of such an error. If that person you hired that is a buddy from down the street floods your home with a leak or burns your home down from soldering he is not insured to cover that and you’re left with the repair bill. Many homeowners policies will not cover these repairs because it was caused by negligent work done by an unlicensed person/company.
- Licensed contractors are held to a higher standard. Licensed contractors have to perform work to meet code compliance and have to meet or exceed industry standards for workmanship. This may not seem like a big deal but it becomes one when you go to sell your home or get a permit for anything on your property, you will be requested by the city to bring the out of code work up to code meaning, you will have to pay to have the work done twice.
Licensed contractors are bonded to provide financial protection to Arizona residents. Licensed contractors have to have a bond as well as contribute to the State of Arizona Recovery Fund protecting residents from OTHER contractors’ errors, not just their own. “The State of Arizona requires all licensed residential contractors to provide financial protection to their customers. The protections apply whether you buy a new home, remodel, build a swimming pool or have a new roof put on your home.
In order to obtain a license, a residential contractor must post a cash deposit or surety bond of $4,250.00 to $15,000.00. In addition, a residential contractor must either pay into the recovery fund or post a second bond of $200,000.00. The vast majority of residential contractors have chosen to participate in the fund. Therefore, there are actually two programs offering financial protection. We will explain in some detail how to collect from either one.”
- Licensed contractors have to pass extensive background checks. You don’t want to just allow anyone to enter your home, licensed contractors in the State of Arizona have to pass background checks and meet certain requirements, when you hire a licensed contractor you’re assured that they are not convicted of such things as child abuse, sex trafficking, criminal trespassing and the list goes on.
This is just a quick highlight of what you receive as part of the value of hiring a licensed contractor. You receive peace of mind that a job will be done correctly by a professional that has had to prove that they know what they are doing. You can rest assured that the person in charge of the work at your home has passed an extensive background check and is safe to have in your home and around your family. A licensed contractor is insured to cover any damages that may happen from faulty work.