It is commonly thought that hiring an unlicensed contractor can save you money. His price appears slightly lower than that of the contractor, who has obeyed the law and gone through the proper channels to secure the appropriate license for the trade they are performing. However, this is not truly the case. Unlicensed contractors run up the price of services and materials. By providing poor workmanship at a low price, they force others to raise their price. They cause more competition for the available jobs resulting in a scramble for what is available and an increase in labor and material prices overall. The licensed contractor must pay for that licensing and insurance. They have overhead and now fewer jobs, but they still need to pay the bills. So, they raise their rates. Then, the unlicensed, NOT ACTUALLY A CONTRACTOR, raises his rates too.
This can also increase insurance claims on homeowners as many of these unlicensed contractors also lack the appropriate insurance coverage. Finally, remember if it reads licensed contractor. Ask yourself, licensed by who and licensed to do what? Then ask the licensed contractor to show you the license. When a contractor says they are insured, ask them what they are insured to do. Many contractors are not insured to be on your roof, for example. So if they fall, guess who is getting that bill? Ask to see the insurance and get proof that they are licensed and insured to do the job that you need to be done.