How to Hire a Contractor in Indiana: 7 Things to Check Before You Sign

The Indiana Contractor Problem

Indiana does not require a statewide general contractor license. Anyone can legally operate as a general contractor in Indiana, sign home improvement contracts, and collect deposits without holding any state-issued credential. Unlike states with broad residential contractor licensing programs, Indiana's protections for homeowners exist primarily in contract law — specifically the Home Improvement Contracts Act (HICA) — rather than in licensing requirements.

Here is the distinguishing detail: Indiana's HICA kicks in at just $150 in combined materials and labor. That low threshold gives the law broad reach, but its protections are only as strong as your willingness to enforce them. The Indiana AG's Consumer Protection Division consistently flags home improvement fraud — unlicensed work, abandoned projects, and lien disputes — as a recurring category of consumer complaints. The legal framework is there; using it starts with getting the basics right before the first dollar changes hands.

Here are the seven things to check before signing anything in Indiana.

1. Verify Licensing — State and Local

Indiana's IPLA licenses specific skilled trades at the state level. For general contractors, you need to verify at the local level.

State-licensed trades (verify at pla.in.gov):

• Plumbing contractors — licensed by the Indiana Plumbing Commission under Indiana Code 25-28.5
• Electrical contractors — state licensing requirements apply
• HVAC contractors — state licensing requirements apply

General contractors — county and city level: Indiana general contractor licensing is entirely local. Marion County (Indianapolis), Allen County (Fort Wayne), St. Joseph County (South Bend), Hamilton County, and other jurisdictions each set their own registration requirements. Requirements range from registration with proof of insurance to passing an exam and posting a bond.

Call your local building department and ask: "Is this contractor registered to do this type of work in this jurisdiction?" For projects in the Indianapolis metro, see our guide to finding a contractor in Indianapolis for city-specific verification details.

Also ask whether the specific work you are planning requires a permit. In Indiana, structural work, electrical, plumbing, and HVAC projects typically require permits. A contractor who suggests skipping permits is creating risk for both you and them.

2. Confirm Insurance by Calling the Carrier

Under Indiana's HICA, the written contract must include the contractor's insurance information. Do not stop at reviewing the paperwork — verify the policy is active.

Request a Certificate of Insurance confirming:

• General Liability: Minimum $1 million per occurrence
• Workers' Compensation: Required for any contractor with employees in Indiana

Call the insurance carrier at a number you find independently, not one the contractor provides. Ask whether the policy is currently active, what the coverage limits are, and whether it has lapsed or been cancelled in the past 12 months. Certificate forgeries exist. Policies lapse for non-payment routinely. A brief phone call eliminates both risks.

If a contractor has any employees on-site and cannot document Workers' Compensation coverage, your exposure if someone is injured on your property can be significant. This is not a step to skip on the basis of a contractor seeming trustworthy.

3. Require an Itemized Bid — Not an Estimate

Indiana's Home Improvement Contracts Act requires written contracts for work over $150 and specifies what those contracts must contain. A legitimate bid should exceed the legal minimum. It must include:

• A detailed description of all work to be performed
• Every material specified by brand, grade, and quantity where applicable
• Labor costs or lump-sum labor by phase
• Permit and inspection fees itemized separately
• Start date and projected completion date (both required by HICA)
• Total price and the payment schedule
• The contractor's name, business address, and any applicable license number

Under HICA, the contractor must sign the contract before the homeowner is required to sign or make any payment. If a contractor asks you to sign first or put down a deposit before they have signed the contract, they are violating Indiana law before work has even started.

4. Get Three Bids from Three Different Contractors

Three bids from three different contractors accomplish more than price comparison. They reveal which contractors missed scope items (they will return with change orders), which ones are pricing inferior materials to hit a lower number, and what the actual market range is for your project in your area.

When reviewing bids, look specifically at how the materials are described. A bid that says "roofing materials" without specifying manufacturer and product line cannot be compared to one that calls out a specific product at a specific weight and warranty level. Ask each contractor to match specifications if necessary so you can evaluate the bids on equal footing.

Bids that are 25% or more below the competitive range almost always reflect missing scope, inferior materials, or a contractor who needs cash flow quickly. Indiana AG enforcement cases involving contractor fraud consistently involve situations where a homeowner chose the lowest bid based on a number rather than evaluating what was behind it.

5. Check References from the Last 12 Months

Request three references from projects completed in the past year with a comparable scope. When you call each reference, ask:

• Did the project finish within a reasonable window of the promised timeline?
• Did the final cost stay close to the original contract, or were there significant change orders?
• Were permits pulled correctly and inspections passed without issues?
• How did the contractor handle problems or surprises when they came up?
• Would you hire them again?

A contractor who cannot provide references from recent, comparable projects either doesn't have them or doesn't want you talking to those customers. Both are meaningful signals. Indiana's small and mid-sized markets are relationship-driven — a contractor with a strong local track record in your area will have no trouble producing references.

6. Understand the Deposit and Payment Schedule

Indiana's HICA requires the payment schedule to be included in the written contract, but does not set a statutory cap on deposit amounts. The professional standard is:

• Deposit: 10–25% at contract signing
• Progress payments: Tied to specific, verifiable completion milestones
• Final payment: Held until all punch list items are resolved and any required final inspections are passed

Watch for these red flags:

• A request for more than one-third of the total project cost before materials are on-site and work has begun
• Payment demanded in cash with no paper trail
• A payment schedule tied to calendar dates rather than project milestones
• Any version of "I need the deposit to cover materials" from a contractor who cannot demonstrate an established business with supplier accounts

Indiana's home improvement fraud statute (Indiana Code 35-43-6) treats receiving an advance payment with intent to defraud as a criminal offense — losses under $750 are a Class A misdemeanor, and larger amounts escalate to felony charges. The law exists because the pattern is common enough to warrant a specific criminal statute.

7. Get Lien Waivers at Every Payment

Indiana mechanics lien law (Indiana Code § 32-28-3) gives subcontractors and material suppliers the right to file a lien against your property if the general contractor does not pay them — even after you have already paid the GC in full. Subcontractors have up to 60 days after completing work to file a preliminary notice, and the lien itself can follow.

The practical protection steps:

1. At each payment milestone, obtain a signed lien waiver from your general contractor covering the payment amount.
2. If you are aware of specific subcontractors on the project, obtain lien waivers from them at each milestone as well.
3. For large material purchases, use a joint check arrangement — the check is made payable to both the GC and the material supplier, so it can only be cashed with the supplier's endorsement, confirming they received the payment.

In Indiana, the process for enforcing mechanics liens moves relatively quickly once a preliminary notice is filed. Discovering an unexpected lien after project completion and after the GC is gone is a much more expensive problem to solve than requiring waivers during the project.

The Fastest Verification Shortcut

If the above process sounds like a lot of work, AboveBoardPros does most of it for you. Contractors in our network have passed license verification, insurance confirmation, reference checks, and business history review before you see their name. You still get three bids and still read the contract carefully — but you start with a filtered pool instead of a blank search.