Would you use a roofer who isn’t licensed but has insurance?

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Would you use a roofer who isn’t licensed but has insurance?

Elliot Cole
Rental Property Investor · Las Vegas, NV · Member since 2019 · 30 posts · 7 votes

I have to replace the roof on one of my properties and received a quote from a roofer. He sent me a copy of his insurance, but he doesn’t have a license because him and his partner split (the license was with the old company) and he is in the process of getting his own. My realtor referred him to me, so i don’t want to totally discount him, but it still makes me nervous. Should I consider using him or is this a show stopper?

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Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
5y

His insurance may not cover him if he is not licensed. He probably obtained it when he was working under a license and is now in violation of the insurance carrier's requirements.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    I know it's probably really low-risk, but I would wait until he's licensed.

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  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    5y

    I would want to check his references and get a price concession to proceed. If it is a torch down roof I would move on.

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  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    5y

    His insurance may not cover him if he is not licensed. He probably obtained it when he was working under a license and is now in violation of the insurance carrier's requirements.

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Greg M.:

    His insurance may not cover him if he is not licensed. He probably obtained it when he was working under a license and is now in violation of the insurance carrier's requirements.

     Exactly. I would wait until he gets his license or at a minimum check to see if his insurance is valid and if it covers him regardless of licensing. 

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  • Todd Rasmussen
    Rental Property Investor · Clarksville, TN · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Elliot Cole

    Some of the best tradesmen aren't licensed contractors, for roofing I would not be overly concerned. Don't pay a deposit and hold retention to make sure you are happy with it to protect yourself against not having a bond or licensing board complaint to protect yourself with. If he balks at no deposit, pay for the materials directly to resolve. Be a little wary, as when company's split you don't know when direction the key personnel really went and both offshoots won't always survive independently. Have him provide you with an insurance cert as additional insured for his worker's comp and if he's the named insured on the policy and not the old business I'd feel okay with it. If you aren't confident with him, go with someone that gives you a better feeling.

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  • Joe SplitrockPro Member
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    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    @Elliot Cole how do you know he is not lying and his lack of license isn't for a different reason? Maybe it is in process, but that shouldn't take long and it is easy to verify with the city or county. There are other possible reasons:

    1. They don't meet the legal requirements to hold a license. It is not hard to get a roofers license, so this implies a major problem. It could be safety violations or complaints.

    2. They are not trying or they are the type of person who likes to cut corners. How do you trust them to do good work if they cut corners?

    3. They are trying to save money by skipping licensing, permits and probably even taxes. That is dishonest, so how do you trust them?

    As others said, if you want that roof to be covered by insurance, the work needs to be done under permit by a licensed professional. There are other risks here that could open you up to liability if someone falls.

    If you do work with him, call the insurance provider, instead of just looking at a certificate. 

    1Reply
  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    5y

    I'd be lying if I said I never used an unlicensed roofer but as a licensed builder myself I can pull permits and check the quality of work, both on jobs before ours and on ours.  Also, having been in the biz as long as I have been I know the questions to ask the proper answers.  That said, hiring anyone is a risk.  I had one licensed contractor pour concrete down a drain.  In his defense it stopped the leak : )   Oh the lessons we learn along the way.  I think a lot of people get too comfortable with "I am licensed".  It is a joke between my wife and I.  I can't do any maintenance myself, two left thumbs, that is not my gift in life.  The day I became a licensed contractor is the day I realized it means practically nothing.  Finding good and reliable crews is not easy and something I am always grateful that we have in place.  Never underappreciate good crews.  As @Todd Rasmussen said some of the best contractors are not licensed....a lot for the opposite reason I am.  I am good at classes/tests, some of them are not.  But they are good doing the work, where I am not.

    Either way you go, be careful. Accept you will get taken advantage of if you do this long enough and be grateful for the good team you have.  

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    5y

    This is probably low risk but do what makes you comfortable. If you do use him get recent references.  Frankly,  It may or may not be his fault. Getting something out of some government agencies these days is like pulling teeth. A license might or might not be quick because they use covid or working from home as an excuse for slow down. 

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  • Tony Kim
    Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes
    5y
    Originally posted by @Colleen F.:

    This is probably low risk but do what makes you comfortable. If you do use him get recent references.  Frankly,  It may or may not be his fault. Getting something out of some government agencies these days is like pulling teeth. A license might or might not be quick because they use covid or working from home as an excuse for slow down. 

    I agree with your reasoning...and I'll be the first to admit that I've had work done in the past without pulling permits.   However, maybe I'm misunderstanding the importance of hiring a bonded contractor. Isn't one of the things the insurance will protect against is the home-owner's potential liability should one of the workers fall off the roof and injury himself? I would think that insurance is pretty important for doing roof-work. The house across the street from our home did roof work a few years before we moved into the area. One of their workers fell down two stories and was seriously injured. Details are sketchy and we don't even know if the worker lived or not, but the common discussion among my other neighbors is to always use a fully insured contractor...especially for roof work as all of our homes are two-story.

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    5y

    @Tony Kim   Sure and it is  just my opinion but he had mentioned the guy having insurance. I am assuming it is in his not the old companies name.  I would be more or less concerned depending on what is being done.  Licensing isn't a protection per se, it is the insurance that protects you.  In RI you could also check the company name to see if the last company license was revoked ,  you could book the work pending the license being issued or you can find someone else.

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  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    5y

    I have used unlicensed contractors, but there are risks.  I provide sole employment to 2 unlicensed handymen (they are self-employed but pretty much only work for us).

    In my market a license is required for jobs above $600 (I believe it is still a $600 limit).  This implies a license is required for a roof.  Here are some risks:

    • Jurisdiction comes along and checks the license, roofer does not have a license so job is shut down (only an issue where licenses are required).
    • There is an injury of some sort and his insurance is not valid because he currently does not have a license.
    • There is a problem with the quality of work.  What recourse do you have if he has no license?

    I have a licensed contractor I have used multiple times and was happy with each previous job (including 2 roofs).  He did a large curb and subcontracted the work out.  The forms were insufficient for the size of this curb and flexed.  The curb looked like it had been set by a drunk.   The contractor spent a lot more time fixing the curb than what should have initially taken to install the curb.  I believe he exerted so much effort to fix the issue both because I am a good customer and also because he is licensed and I could complain about a curb that is significantly waved.  BTW even with all his efforts, the finished curb is barely acceptable (it is a lot of work to fix a badly poured large curb (this curb is over a foot wide).

    If you go with the unlicensed contractor, the price should reflect the increased risk associated with using the unlicensed contractor.

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  • Account Closed
    Member since 2021 · 154 posts · 108 votes
    5y

    I don't use licensed roofers for my new builds, that said they operate under my license and I inspect 100% of the roof.

    i don't blame you, roof companies near me charge $165 per square labor only and my unlicensed guys charge $45. It's a no brainer there.... 

    I just started a roofing company for my sub division and hired 4 guys and have them ownership in the company. 

    1Reply
  • Allan Smith
    Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
    5y

    Especially for roofing I would not worry about having a license. Mi amigo has been working for me for years and I don't think he has Insurance either. Incredible prices though.

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  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    5y

    For someone that has rehabbed properties without hardly any financial backing when I started I have used many unlicensed people. If I had to wait until I could  afford some big contractor that had all the bells and whistle‘s I would not have gotten to where I am this fast. It is my firm belief that serval of the posters that said only use a licensed roofers possibly have never had a new roofs installed as a broke Ambitious Rehabber. They surely can correct  me if they have. The last roof I replaced came as a referral from someone that I have used on many projects. I think he was license if I remember he even said he had insurance. :-)I have a little more money now than when I first started. LOL

    Most of my help wasn’t Licensed. Was it a risk? Sure it was a risk. Real estate to risk. Being self-employed to risk. Leaving your house in the morning is a risk.

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  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    I didn't even know there was such a thing as a roofing license. In TX a roofing contractor doesn't need one.

    2Reply
  • Patrick Page
    Property Manager · McLean, VA · Member since 2021 · 36 posts · 8 votes
    5y

    Absolutely not. In general unlicensed contractors do work on your property, your homeowners and liability insurance policies will not cover damage caused by the work should the work be completed incorrectly. For roofs, if there was a leak or an ice dam and the insurance company finds out an unlicensed contractor completed the work they will not pay for another repair or for the damage caused. Another good reason to use a licensed contractor is that you would also have potential recourse through the state licensing board should the contractor not complete the job and run off with your money. Getting a license is not terribly difficult in most states. Use contractors who take the time to do things right. These little details matter.

    3Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Joe S.:

    For someone that has rehabbed properties without hardly any financial backing when I started I have used many unlicensed people. If I had to wait until I could  afford some big contractor that had all the bells and whistle‘s I would not have gotten to where I am this fast. It is my firm belief that serval of the posters that said only use a licensed roofers possibly have never had a new roofs installed as a broke Ambitious Rehabber. They surely can correct  me if they have. The last roof I replaced came as a referral from someone that I have used on many projects. I think he was license if I remember he even said he had insurance. :-)I have a little more money now than when I first started. LOL

    Most of my help wasn’t Licensed. Was it a risk? Sure it was a risk. Real estate to risk. Being self-employed to risk. Leaving your house in the morning is a risk.

     The biggest cost of a roof where I am is in the labor and how fast they can get it done. I have used both and didn't save any money by using a small unlicensed guy because it takes them forever to do the job. In my opinion a roof is something you want done in 4 or 5 hours; generally only licensed contractors have enough people available for the 10-15 guys it takes to do a roof that fast. As for the licensing I don't particularly care one way or the other about the license, only that insurance generally requires a contractor's license in your locale (there's no "roofing license" where I am, just a contractor's license) in order to be valid (insurers don't want to write policies for just some guy who sticks his name on the van) and roofing is a high injury profession. It wouldn't surprise me a bit if the roofers I use themselves use guys they can't legally cover with their workman's compensation, (i.e. illegal immigrants) but it just provides one more layer of risk management between myself and the contractor.

    You're right about risk in general - I just like to manage it from my point of view. I don't worry about a leaky roof or an improper install because of licensing, I just want a couple of layers of exposure between me and the worker who falls off my roof. If someone gets hurt at one of my properties, I want him/her to collect from someone other than me - the other guy's insurance, then the other guy, then my insurance are buffers :)

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  • David Browne
    Contractor · Marietta, GA · Member since 2019 · 7 posts · 3 votes
    5y

    @Elliot Cole as a contractor here in Atl that specializes in exterior renovations (roofing, siding, gutters etc.) I do not need a state license for my projects. And, licensing should have absolutely 0 bearing on the validity of insurance. The two things you need to do is confirm that the COI you got from him is valid (call and confirm). Policies are year to year and often paid monthly. Make sure this is not a case of one premium being made and then the policy cancelled. Secondly, don’t pay him a dime until he is finished and you are satisfied with the work. Lastly, you can check his standing with your local BBB.

    Mike drop...

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  • Account Closed
    remodeling contractor · Birmingham, AL · Member since 2015 · 69 posts · 49 votes
    5y

    @Elliot Cole

    So, the two questions I have:   is this a state license or a business license that concerns you?   And why would you go with this roofer as opposed to a state licensed, in-hand license, roofer?  Price?  Timeframe?

    In Alabama, you have to have a state license to do roofing (unless you have a residential or GC license then you are covered) otherwise you are considered unlicensed.  And no license=no permit.  

    Not sure your state's requirements but that's a starting point.

    And, as others have said, verify his insurance should you move ahead and have him do the work.

    Best,

    Mike

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  • Elliot Cole
    OP
    Rental Property Investor · Las Vegas, NV · Member since 2019 · 30 posts · 7 votes
    5y

    Lots of really good info on this thread. I ended up putting an RFP out there (HomeAdvisor/Angie's List is really helpful for these situations) and received a few bids already. Strangely enough, the unlicensed guy is NOT more cost competitive than the licensed, vetted contractors. If he was way cheaper and had good insurance, I might consider it, but there's something here that doesn't make sense with his pricing and unless something changes, there's no reason not to go with one of the other contractors.

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  • Greg H.Pro Member
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    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    5y

    As discussed this is very state dependent.  Contractors roofing and otherwise except for plumbers and electricians and the like do not have to be licensed in Texas.  Actually do not think I have ever used one who was.  Saying that some smaller cities require one to register for $25-50 

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  • Louie Gabriel
    Member since 2020 · 57 posts · 24 votes
    5y

    All the answers above are all good. 

    I think It is not about having no risk. It is about taking calculated risks and making money in exchange for taking those risks.

    Anyone who has done a large amount of business & claims to have never hired someone to do something under the table EVER is probably lying to themselves or to the forums.

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