Whether it's due to the severe hurricanes that devastated parts of the country, or the recent economic downturn that has contractors desperate for work, contractor fraud claims jumped 31 percent between 2001 and 2008, according to the Better Business Bureau (BBB).

How to Hire a Contractor

The Federal Trade Commission recommends that you interview at least three contractors. Get written estimates and references, and don't automatically go with the lowest bidder, because sometimes you get what you pay for.

During each contractor interview, you should ask the following questions:

• How long have you been in business? Make sure you choose someone well-established with a good BBB record.
• Are you licensed and registered appropriately with the state? Ask to see each contractor's license.
• Can you provide proof of insurance? Contractors should carry personal liability, workers' compensation, and property damage coverage.
• Will this project require a permit? Contractors are responsible for securing permits; be wary of anyone who asks you to do this, which might be a clue that they aren't licensed.
• Will you be using subcontractors? Ask to meet them, and make sure they also carry the appropriate licensure and insurance.
• Can I see a list of references? The list should include projects similar to yours. Call those references, and ask about their level of satisfaction with the work, the price, and the time frame.

A Final Word of Caution

Make sure you feel comfortable communicating openly with any contractor you choose. Then put all agreements - price, time frame, materials, scope of project, methods and timeline for payment, how changes will be handled, and all warranties or guarantees - in a contract that you both sign before any work begins.