What to Ask a Contractor Before You Hire Them

The right questions — on licensing, insurance, contracts, and payment — before you sign anything.

RenoHub · June 19, 2026 · 6 min read

Start with licensing — but know that it varies

There is no federal general contractor licensing requirement in the US. Contractor licensing is regulated at the state level — and in some states, at the county or city level. What that means in practice:

• Some states have comprehensive statewide licensing systems. California's Contractors State License Board (CSLB) is a well-known example — contractors must hold a valid CSLB license for most residential work above a certain threshold.
• Other states license individual trades (electricians, plumbers, HVAC) but impose little or no licensing requirement on general contractors who coordinate them.
• A small number of states have no statewide GC licensing requirement at all for residential work, leaving it to local jurisdictions.

The only way to know what applies to your project is to check with your state's contractor licensing board directly. Most boards have a free online license lookup. Search the contractor's name or license number and confirm the license is active, in good standing, and covers your type of work. Don't take the contractor's word for it — verify yourself.

Also ask about subcontractors. Trade licenses for electricians, plumbers, and HVAC technicians are separate from a GC license. Confirm that anyone pulling permits or doing licensed trade work on your job holds the required licenses for your state and locality.

Insurance: two policies, two different risks

Ask for a Certificate of Insurance (COI) and verify it directly with the insurer — certificates can be forged. Two policies matter most:

Commercial general liability (CGL)

This covers property damage and bodily injury arising from the contractor's work. A legitimate contractor will have no hesitation providing a COI. Ask that the certificate name you as the certificate holder.

Workers' compensation

This one surprises many homeowners. Workers' comp is not just the contractor's concern — it's yours. If a worker is injured on your property and the contractor doesn't carry workers' comp, you could face liability for medical costs and lost wages depending on your state's laws. Verify this coverage on the COI. Note that a sole proprietor with no employees may be legally exempt in some states — exemption rules vary. When in doubt, ask your homeowner's insurance carrier how your policy responds.

Liability insurance and workers' comp are separate policies. Seeing one does not mean the other exists.

The written contract: what it must include

Never start work on a verbal agreement or a one-page estimate. A proper contract should include:

• The contractor's full legal name, business entity, and license number
• A detailed scope of work — materials, specifications, and brands or models where you've specified them
• A project timeline with start date and estimated completion
• The payment schedule tied to milestones (not a calendar)
• The change order process — how any scope changes are documented and priced before work proceeds
• Who is responsible for pulling permits (it should be the contractor)
• Cleanup and debris removal terms
• Warranty terms for both workmanship and materials
• Dispute resolution process

If a contractor resists putting any of this in writing, that is a serious red flag.

Payment schedule and deposit limits

A healthy payment schedule ties each installment to a verifiable project milestone — framing complete, rough-in inspections passed, drywall hung — rather than to arbitrary dates. Keep a meaningful final payment until the work is complete and you're satisfied.

Some states limit how large an upfront deposit a contractor can legally collect before work begins or materials are delivered. California is a frequently cited example. Even where there's no legal limit, a large upfront cash payment before any work starts is one of the most common warning signs of contractor fraud. Confirm your state's rules with the licensing board or a local consumer protection office.

Mechanic's liens and lien waivers

This is one of the most important financial risks in US home renovation — and one most homeowners never hear about until it's too late.

Under most state laws, contractors, subcontractors, and material suppliers who are not paid can file a mechanic's lien (also called a materialman's lien or construction lien depending on the state) against your property. The critical part: they can do this even if you paid your general contractor in full. If your GC doesn't pay their subs or suppliers, those parties may have lien rights against your home.

Lien waivers are signed documents by which the GC, subcontractors, and suppliers release their lien rights in exchange for payment. There are two types:

• Conditional lien waiver — releases rights conditional on a payment actually clearing
• Unconditional lien waiver — releases rights outright

Best practice is to collect lien waivers from the GC — and on larger projects, from known subcontractors and material suppliers — at each payment milestone. Mechanic's lien laws vary significantly by state. On any major project, consult a local real estate or construction attorney.

References: ask specific questions

Ask for at least three references from recent, completed projects of similar scope. Actually call them. Ask specifically:

• Did the project finish close to the original timeline?
• How were unexpected issues handled?
• Did the final cost track the original estimate?
• Would you hire them again?

Also search the contractor's name and license number with the state licensing board for any disciplinary actions or complaints. The Better Business Bureau and local trade association directories can be useful supplementary sources — but not the only ones. Many counties have online court case search portals where you can check for prior litigation.

Red flags worth knowing

• Cannot or will not provide a verifiable license number or Certificate of Insurance
• Demands a large cash deposit or full payment before any work begins
• Cash-only payment requirement
• Suggests you pull your own permits for work they will perform
• Offers a price dramatically lower than every other bid with no explanation
• No fixed business address or only reachable by cell
• Pressures you for an immediate decision
• Can't provide references from comparable projects
• Resists a written contract

How RenoHub helps

Once you've hired, RenoHub's Contractor Works Tracker picks up where your vetting left off. Import your contractor's PDF estimate and RenoHub's AI extracts every line item into a live checklist. As the project progresses, you can track actual spend against the quoted price in real time — making it easy to spot scope creep, verify milestone completions before releasing payments, and keep a running record of what was agreed versus what was done.

For document storage, RenoHub's Document archive keeps your contract, COI, lien waivers, and payment records in one place, synced to iCloud. RenoHub is iPhone-only. Privacy-first — no account needed, your data stays on-device and in your iCloud, never on RenoHub's servers.