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Licensed vs. Unlicensed Bathroom Remodelers: Why It Matters

by

JG Wentworth

April 17, 2025

5 min

Licensed contractor working on shower installation

When it comes to remodeling your bathroom, one of the most important — and often overlooked — decisions is who you hire to do the work. Not just in terms of skill or style, but in something more fundamental: whether the contractor is licensed or not.

At first glance, going with an unlicensed remodeler might seem like a tempting way to save some cash. Maybe a friend of a friend knows someone who “does great work” and can undercut the bids from official companies. But before you sign anything — or worse, hand over a deposit — it’s worth understanding exactly what you’re risking by choosing an unlicensed contractor over a licensed professional.*

What Does It Mean to Be a “Licensed” Contractor?

When a contractor is licensed, it means they’ve gone through a process mandated by the state or local municipality to prove they are qualified to do specific types of work — in this case, bathroom remodeling. This usually includes:

  • Passing trade-specific exams
  • Meeting minimum experience requirements
  • Carrying liability insurance and workers’ comp
  • Agreeing to follow local building codes and regulations
  • Maintaining their license through periodic renewals and ongoing education

In contrast, unlicensed contractors have not completed this process. That doesn’t automatically mean they’re unskilled or untrustworthy — but it does mean you’ll have fewer protections if things go wrong.

Compare Top Bath Remodeling Contractors

Compare Top Bath Remodeling Contractors

Why It Matters: The Real-World Differences

1. Permits and Inspections

Most bathroom remodels involve plumbing, electrical, or structural changes — all of which typically require permits. A licensed contractor knows how to pull permits, schedule inspections, and make sure everything is up to code.

Unlicensed remodelers may skip the permit process altogether. That might seem like a shortcut, but it could bite you later. If your city finds out work was done without a permit, you might face fines or be forced to tear out the unpermitted improvements.

And when it comes time to sell your house? You’ll be legally required to disclose that work was done without permits. That can reduce your home’s value or kill a deal entirely.

2. Liability and Insurance

Licensed contractors are required to carry general liability insurance and, in most states, workers’ compensation coverage. This protects you in case:

  • A worker is injured on your property
  • There’s accidental damage to your home
  • Something goes wrong and the work needs to be redone

If you hire an unlicensed contractor who isn’t insured, and a worker gets hurt or your property is damaged, you are legally and financially responsible.

3. Workmanship Standards

Licensed remodelers must demonstrate knowledge of best practices, building codes, and safety standards. They have a vested interest in maintaining a good reputation and avoiding license violations.

Unlicensed remodelers operate outside those constraints. If they cut corners or install things incorrectly, there’s often no recourse beyond a small claims court — and even then, recovering damages can be tough.

4. Contract Protection

Most states require licensed contractors to use written contracts with specific protections for the homeowner, including:

  • Detailed scope of work
  • Clear timelines and payment schedules
  • Warranties or guarantees
  • Terms for change orders or disputes

Unlicensed remodelers may not offer any formal agreement. That lack of clarity often leads to misunderstandings, delays, or overcharges.

5. Recourse If Things Go Wrong

If a licensed contractor walks off the job or does shoddy work, you can usually file a complaint with the state licensing board. Some areas even offer compensation from a recovery fund.

With an unlicensed remodeler? There’s no licensing board to intervene. Your options are limited, and enforcement is often difficult.

The Price Temptation: Is It Ever Worth It?

Unlicensed remodelers often charge less — but they also don’t pay for licenses, insurance, or taxes. That allows them to undercut professional bids.

But any savings can easily be wiped out by mistakes, delays, or legal issues. A bad plumbing job, faulty wiring, or improper sealing can cost far more to fix than what you saved upfront.

Red Flags to Watch Out For

If you’re interviewing potential remodelers, watch out for these warning signs:

  • No license number or claim to be working under someone else’s license
  • No written contract
  • Large upfront deposit request, especially in cash
  • Suggestions to skip permits or inspections
  • Inconsistent or missing online reviews

How to Verify a Contractor’s License

Most states offer an online license lookup. Search by company name, individual name, or license number. Make sure the license:

  • Is active and in good standing
  • Covers the specific type of work
  • Matches the name on the contract and website

Also, ask for proof of liability insurance and workers’ comp. A legit contractor should be happy to provide it.

Final Thoughts

Your bathroom is one of the most used — and expensive — areas of your home to remodel. Cutting corners on who you hire can cost you big in the long run. While a licensed contractor may cost more upfront, that investment pays off in peace of mind, legal protection, and long-term quality.

In remodeling, like most things in life, you get what you pay for. And when it comes to your home, it’s rarely worth the gamble.

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 JGW Connects, LLC is an independent, advertising-supported comparison site and marketing lead generator and does not play a role in decisioning for any of the third party products advertised on this webpage. JGW Connects, LLC and the JG Wentworth Company family of companies are not affiliated with the companies advertising on this webpage. You are not charged for our services. JGW Connects, LLC may receive a referral fee or other affiliate fee for connecting you with these third-party companies or upon you contracting with a third-party company. We do not make any guarantees that these are the only providers in the marketplace, or that their products or services will meet your needs. The products and services presented to you may or may not be the best, or only options, available.

JGW Connects does not provide any of the products or services advertised and does not make any decisions regarding your eligibility for those products or services. All decisions regarding approval or denial of a particular product or service are the responsibility of the participating company and will vary based upon your particular financial situation, and criteria determined by the company to whom you are matched. Not all consumers will qualify for the advertised rates and terms.