• Unlicensed usually means uninsured. If you use a contractor who is uninsured, it means the contractor has no way of reimbursing you for any property damage he or she causes. This means you end up paying the price. Likewise, if the contractor carelessness leads to injury or damage to someone else's property, the problem is likely to become yours.

• No coverage under homeowner's policy. Some homeowners believe it is safe to use an uninsured contractor, assuming that any damages incurred would be covered under their own insurance policies. However, this isn't the case. Most home owner’s policies require that any work to the property be done by licensed contractors; coverage is often specifically excluded for damages caused by "Bootleg" Contractors.

• Noncompliance with building codes. Unlicensed contractors are often unfamiliar with the applicable building codes and are unable to obtain permits. If your project isn't permitted or does not comply with the codes, you may - - and probably will - - be ordered to remove or repair the job. Even if the doesn't "Catch" your code violation right away, you will almost certainly have to correct it if and when you try to sell your house.

• Poor quality work. Not all unlicensed contractors do poor quality work. And not all poor quality work is done by unlicensed contractors. HOWEVER, as a rule, if there is shoddy work to be done, it's usually done by unlicensed contractors. Because unlicensed contractors aren't subject to meeting specific standards, they are often untrained, less experienced and unqualified to do certain types of work.

• Con Artists. Scams in the construction industry -- especially in the home improvement business -- have become almost legendary in the last few decades. Con artists posing as qualified licensed contractors, and often targeting the elderly, have made national news any number of times. Even so, unwary homeowners continue to be taken in by these pseudo contractors, who often promise unrealistically low prices or use scare tactics to close the deal. In these cases, the homeowner typically ends up with either an incomplete or a low-quality project -- and several hundred of even thousands of pounds less."