Chapter 37 Quiz: Finding and Vetting Contractors

Part A: Multiple Choice

1. A homeowner needs to add two new electrical circuits to their home. Which type of contractor should they hire?

a) A general contractor with a Class B license b) A licensed electrician (journeyman or master electrician, or a company employing them) c) A handyman who advertises electrical work d) A home inspector who can also make repairs

2. Why is a personal referral from a trusted person generally considered more reliable than a highly-rated online platform review?

a) Online platforms do not verify that reviewers actually used the contractor b) Personal referrals come with detailed, specific, first-person accounts that can be questioned and followed up on, and cannot be gamed by posting fake reviews c) Online platforms charge contractors for listings, creating a financial conflict d) Both a and c

3. When verifying a contractor's workers' compensation insurance, what is the correct procedure?

a) Ask the contractor to verbally confirm they carry workers' comp b) Accept a certificate of insurance that the contractor provides directly c) Call the insurance company listed on the certificate to confirm the policy is currently active d) Check the contractor's website for their insurance information

4. If an uninsured worker is injured on your property while performing contracted work, what is the likely legal outcome in most US states?

a) The contractor is solely responsible; homeowner liability is explicitly excluded by law b) Your homeowners insurance pays automatically with no exposure to you c) Depending on state law, you as the property owner may face liability for the worker's medical expenses and lost wages d) Workers' compensation claims are handled by the federal government regardless of contractor insurance status

5. The EPA Section 608 certification is specifically required for which type of contractor?

a) All licensed general contractors working on homes built before 1978 b) Plumbers performing gas line work c) HVAC contractors or technicians who handle refrigerants d) Electricians performing panel upgrades

6. A contractor offers to do a bathroom remodel for 45% less than every other bid you received. Which response best represents the guidance in this chapter?

a) Accept immediately — this is the free market working in your favor b) Decline without further inquiry — a low bid is always a red flag c) Ask the contractor to explain line by line why their bid is so much lower, and look for specific causes (lower-spec materials, missing scope items, uninsured labor) d) Accept the low bid but add protective language to the contract

7. A contractor suggests that for a deck addition, you pull the permit yourself as the homeowner to save time and money. This arrangement is problematic primarily because:

a) Homeowners are legally prohibited from pulling permits in most states b) When the homeowner pulls the permit, they become the contractor of record and assume legal responsibility for the work meeting code, releasing the actual contractor from oversight c) The permit fee is the same whether the homeowner or contractor pulls it d) Pulling a permit as a homeowner triggers a property tax reassessment in most jurisdictions

8. Which of the following contractor behaviors is the LEAST concerning from a red-flag perspective?

a) Requesting 70% of the project cost as an upfront deposit before work starts b) Being unavailable for 3 weeks before project start due to a full schedule c) Requiring all payment in cash d) Reluctance to provide local references

9. In the specialty contractor context, what is the primary concern with HVAC service technicians who are compensated based on the parts and equipment they sell?

a) They are unqualified to diagnose HVAC problems accurately b) Their compensation structure creates a conflict of interest that may lead to unnecessary part or system replacements c) Commission-compensated technicians are not EPA 608 certified d) They are not permitted to provide written estimates

10. According to Section 37.7, which client behavior most consistently produces better prices and service from contractors over time?

a) Always negotiating the price to the absolute minimum before agreeing b) Changing contractors frequently to prevent any single one from knowing too much about your home c) Paying promptly, being a prepared client, communicating clearly, and giving honest referrals d) Paying the highest rates to signal that you're a premium client

Part B: Short Answer

11. A neighbor gave you a referral for a contractor. Before calling this contractor, list three specific verifications you should complete. Explain why each matters.

12. Explain the concept of "sole proprietor workers' comp exemption" and describe how a homeowner should address this potential liability gap when hiring a sole-proprietor contractor.

13. A contractor you interviewed gave a vague answer when you asked "who specifically will be doing the work on this project?" Why does this question matter, and what information are you trying to obtain?

14. Describe three specific questions you would ask when calling a contractor's reference, and explain what you'd be listening for in each answer.

15. Dave Kowalski uses community relationships rather than formal contractor searches for most of his home maintenance needs. What does his approach gain that typical online-review-based contractor searches miss? What does it require from the homeowner?

Answer Key

Part A

1. b — Electrical work must be performed by or under the supervision of a licensed electrician. Handymen and general contractors without a specific electrical license cannot legally perform electrical work in most jurisdictions.
2. b — Personal referrals involve specific, verifiable, first-person accounts from someone whose judgment you know. Online reviews can be fabricated and are difficult to follow up on. The correct answer is b; while a and c have truth to them, b is the most direct and complete explanation.
3. c — Certificates can be forged or may represent lapsed policies. The only reliable verification is calling the insurance company directly.
4. c — In most US states, an uninsured worker injured on your property may have legal recourse against you as the property owner. This is one of the most important and least-known homeowner liability issues.
5. c — EPA Section 608 is a federal certification required for anyone who purchases, handles, or works with refrigerants. It applies specifically to HVAC work involving refrigerant systems.
6. c — A 45% lower bid contains important information. Refusing to consider it at all (b) is too rigid; accepting without investigation (a and d) is reckless. Ask for a specific explanation.
7. b — When homeowners pull permits, they are the contractor of record. This is the core problem with the homeowner permit arrangement.
8. b — Being busy is not a red flag; it often indicates a contractor who is in demand. The other three options are significant red flags addressed in Section 37.5.
9. b — Commission-based compensation for parts and system sales creates a direct financial incentive to recommend unnecessary work. This is a well-documented industry issue.
10. c — The section makes clear that the best long-term contractor relationships are built on promptness, preparation, clarity, and referrals — not on grinding price to the floor.

Part B — Sample Responses

11. Three verifications before calling the referred contractor: (1) License verification through the state licensing board — confirm the license is active, covers the relevant trade, and has no disciplinary actions. This takes two minutes and confirms the contractor has met minimum legal requirements. (2) Insurance verification — when you call the contractor, request a certificate of insurance and follow up by calling the insurer to confirm the policy is current. A referral doesn't guarantee the contractor is currently insured. (3) Additional online reviews beyond the referral — search the company name and owner name for reviews on multiple platforms, any court records, and any Better Business Bureau complaints. A single good referral is a starting point, not a complete vetting.

12. In most states, sole proprietors (owner-operators with no employees) are legally exempt from carrying workers' compensation insurance on themselves. This means if a sole-proprietor contractor is injured on your property, they cannot collect workers' comp — and depending on state law, they may have the right to pursue a liability claim against you as the property owner. To address this, homeowners should ask any sole-proprietor contractor directly: "Are you exempt from workers' comp? If so, how do you handle the liability exposure if you're injured on my property?" Some sole proprietors carry voluntary coverage on themselves; others carry a general liability policy that addresses this. Some homeowners' policies may provide coverage in this scenario. Consulting your homeowners insurer about the specific exposure in your state is advisable.

13. Many homeowners sign a contract with a skilled, personable contractor and then discover the contractor never appears on site — the work is performed by a crew of unknown qualifications. This isn't automatically bad (large professional companies work this way with trained crews), but you need to understand the chain of accountability: who is doing the work, what are their qualifications, and who do you contact when you have a question or concern? A vague answer ("my guys") doesn't give you this information. A good answer names the lead worker, describes their role, and clarifies the contractor's own presence schedule.

14. Question 1: "Did the final cost match the original bid?" — listening for how significant budget overruns were, whether they were explained and documented (change orders), and whether the reference felt they were treated fairly or surprised. Question 2: "How did the contractor handle problems when they arose?" — this is the most revealing question. Construction always produces problems. The question is whether the contractor communicated proactively, took responsibility, and resolved issues promptly. A reference who says "there were a few issues, but they always called me right away and fixed everything" is actually a more confident reference than one who says "everything was perfect" (which may mean they had low standards). Question 3: "Would you hire them again without hesitation?" — the pause before "yes" is as important as the answer. Genuine enthusiasm vs. polite tepidness reveals a lot.

15. Dave's approach gains: verified track record (he has seen these contractors' work directly, not just reviews), established trust and communication norms, mutual accountability (these are community members who know Dave and whose reputation depends on doing good work for neighbors), and priority access during emergencies. It requires a sustained investment in community relationships over many years — attending community events, offering reciprocal help, knowing neighbors as people rather than as transactional contacts. This type of capital takes years to build and cannot be replaced by an app. The urban equivalent requires intentional effort: getting to know neighbors, participating in neighborhood organizations, building actual relationships rather than treating neighbors as anonymous.