Study Shows Using Casual Laborers Costs Homeowners in Long Run

December 12, 2006

Homeowners who hire unlicensed contractors believing that will save them money may be penny-wise and pound foolish, according to a survey by Seattle-based Pemco Insurance.

In its survey, Pemco found of Washingtonians who hire third-parties for repairs around their home, one in 10 will hire an unlicensed contractor. “The tragedy of hiring a casual laborer is that it can cost homeowners hundreds of times the money they saved, and worse, it can jeopardize their safety,” said Jon Osterberg, company spokesman.Two-thirds of survey respondents believed hiring an unlicensed contractor would save them money, the survey noted.

According to Osterberg, one of company’s policyholder in Kent, Wash., hired an unqualified contractor to build a carport onto his house. Because the builder used materials that were too heavy and attached the carport only to the home’s siding, not into the studs, the carport collapsed. The fallen debris also crushed the homeowner’s motorhome.

“The sad part of the story is that PEMCO had to reject the insurance claim after an engineer determined the carport was improperly built,” Osterberg said.

According to the poll, of those who hire third parties for home repairs, painting, and upgrades, one out of 10 Washingtonians will hire a worker who is not licensed or bonded. Those workers might not have current knowledge of building codes and can lives in danger if the work is not done correctly, Osterberg added.

“It only takes a few minutes for a homeowner to verify if a contractor is licensed and bonded,” he said. “It takes much longer to repair shoddy work.”

Many other homeowners attempt to save money by doing home repair and remodel work themselves, the poll showed.

“When homeowners look to save a buck, they often don’t realize the project they thought was easy requires expertise,” Osterberg added. “It’s usually more expensive to fix work done improperly than to pay to have it done right the first time.”

A man in Spanaway, Wash., recently attempted to wire his house rather than hire a licensed electrician. According to Pemco, the homeowner made a series of mistakes, including connecting aluminum and copper wires of different gauges directly together without using a junction box. The wiring overheated and sparked a fire, and a state inspector ordered that the entire house be rewired. It cost nearly $20,000 to correct, Osterberg said.

“If the homeowner hired a licensed electrician, he could have saved a huge amount of time, money, and frustration,” he said. “Not to mention the danger he put his family in while they lived in an unsafe house.”

Pemco recommends homeowners always hire a licensed and bonded contractor whenever the work involves a permit, codes, or has other regulatory restrictions.

“If you’re not sure what you’re doing, it’s always best to seek the help of an expert who can tell you whether or not the work is suitable for a do-it-yourselfer,” Osterberg said.

Homeowners in Washington that want to check the credentials of a contractor can visit the Labor and Industries Web site:

Pemco’s poll was a statewide survey conducted by Informa Research Services Inc. of Seattle. The poll has an accuracy of +/-4 percent at the 95 percent confidence level. People who want to compare their responses with the PEMCO Northwest Insurance Poll can visit

Source: Pemco

Topics Homeowners Contractors

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