you a confident consumer, or do you have much learn
about the art of hiring smart?
these five questions, and no matter how you score, you’ll
feel better about picking a contractor for your next big
project. Look for answers at the end.
When doing research before hiring, which action is most
Asking a contractor for three to five references.
Asking a contractor for his or her three to five most
Which of these attitudes should prompt you to move on to
another prospective contractor?
"Am I licensed? Nah; that’s just a regulatory
"Insurance? That would just make me more
"Skip the permit. No one will ever know."
All of the above.
When checking that a contractor is properly insured for
liability, which action is most savvy?
Asking the contractor for a certificate of insurance.
Getting an insurance certificate and calling the insurer
to confirm active coverage.
Confirming coverage directly with the insurer and then
getting named as an "additional insured" on
the contractor’s general liability policy.
Which statement is NOT an accurate description of a
contractor surety bond?
An agreement among the customer, the contractor and the
agent that issues the bond, usually an insurance
A marketable, fixed-interest government debt security
with a specified maturity date.
A way to guarantee that the customer can be compensated
if the contractor fails to perform the services outlined
in the contract.
A way to protect homeowners from shoddy work, project
abandonment, property damage and any unpaid supply or
Which contract type is likely to be better for the
Time and materials
b: Be sure your contractor has earned referrals,
especially on recent jobs, since work quality can change
over time. Online reviews on a trusted site are a great
info source, but consider the added step of contacting
references and asking detailed questions.
d: Beware of a contractor who downplays the importance
of covering your legal bases. Find out what, if any,
trade licenses are required where you live. Make sure
your contractor carries liability and workers’
compensation insurance coverage. Check local permitting
requirements. This is particularly important if you’re
making any plumbing, electrical or mechanical changes to
your home, or planning renovations, additions or
contract work that may change your home’s structure.
c. While it’s smart to ask to see a contractor’s
certificates of insurance, it’s an even better
practice — because paperwork can be faked or altered
— to contact insurers to confirm coverage. Top-rated
insurance providers recommend yet another step: having
yourself named as an "additional insured" on
the contractor’s general liability policy. This
ensures you’re covered against other potential
liability, such as a worker breaking a pipe that causes
a neighbor’s yard to flood. Coverage may cost little
or nothing, plus you’ll be alerted if the contractor’s
b. Smart consumers know that a contractor’s bond can
protect them in a variety of ways. Also, many states
require that contractors be bonded in order to get a
license. To determine if a contractor is bonded, ask for
a bond number and certification. Take care that the bond
and license are up to date.
a: A fixed-price contract is the most common type of
home remodeling contract, and the type most consumers
should demand from a general contractor. A fixed-price
contract spells out precisely what a project will cost,
including all permits, building materials and labor. It
locks in the overall cost, preventing the general
contractor from raising the price once all parties sign
time and materials contract bills you by the hour for
labor and materials. Some homeowners incorrectly assume
this will save them time and money. In reality, it’s
like handing the general contractor a blank check,
because the homeowner will pay extra costs that arise.
An unscrupulous contractor has less incentive to finish
in a timely manner. In fact, in California, time and
material contracts aren’t legal for home improvement