Insurance

When upgrading or installing your heating and air-conditioning system, it can be tempting to look for the cheapest contractor in hopes of saving money.

Chances are, if you do, you'll be hiring someone who is unlicensed, and this can cause a host of problems when installing your HVAC (heating, ventilation, air-conditioning) system.

Your HVAC system is arguably one of the most important components of your home. This is how you heat your home in winter and cool it in summer. It's one of your home's most significant expenses and has a major effect on your home comfort.

Most jurisdictions, including Ontario, require or encourage their HVAC contractors to be licensed. Becoming licensed ensures that a contractor meets minimum standards for technical knowledge, experience and respect for safety. Licensed contractors are also usually monitored by a government agency or industry association and unsafe companies can lose their licences if they perform shoddy work or cheat their customers.

A shoddy HVAC system can be expensive to run, dangerous to your health and reduce the resale value of your home.

In Ontario, the Electrical Safety Authority, an independent industry watchdog, reports that since 1988 at least 100 people have been killed by electrocution in homes because of improper and unsafe work and there have been at least 3,000 electricity-related fired each year because of poor workmanship.

While it's not illegal for you hire an unlicensed contractor and pay them cash, it can be very difficult to get your money back if something goes wrong. Even worse, homeowners can be held legally responsible in some cases if they hire an unlicensed HVAC contractor.

For one, licensed HVAC contractors are required to obtain the necessary building and work permits from the local government office, depending on the type of work they are doing in your home. Most unlicensed contractors don't bother with this paperwork. But many homeowners don't realize that when a contractor skips the necessary permits, it's the homeowner that can be fined, not the contractor.

Licensed HVAC companies are also required to have some form of insurance to cover injuries to workers and damage to your home. Few unlicensed contractors have this kind of insurance. If an unlicensed contractor, or one of its employees, is injured while working on your HVAC system, as a homeowner you can be held legally responsible for the worker's medical expenses, lost wages and the cost of pain and suffering. You will also have to pay for any damages to your home, or to the company equipment.

Sometimes your homeowner's insurance won't cover damages to your home that are performed by an unlicensed contractor - especially if you haven't signed a written contract.

It can even be difficult to take an unlicensed contractor to court since they typically won't sign a contract with you and it can be difficult to prove to a judge that any problems in your home were a result of the contractor's work. Many are fly-by-night operators who disappear as soon as the work is done, making them tough to track down.

While a licensed contractor may seem more expensive, they can save you significant amounts of money in the long run, by filing the proper paperwork, having the right insurance coverage, and having the necessary knowledge and experience do safely install the best HVAC system for your home.