At the Providence JLC Live show this week, I had the privilege to work with Mike Jeffries to present a class, "Marketing Mastermind Hands-On Workshop".
During the class, a question came up on how to deal with contractors who have let their insurance and sometimes even their licenses expire. "How do you compete with that?" was the question.
Mike's response - if you suspect the owners are talking to uninsured contractors, suggest to the owner that they should request a copy of their insurance coverage from their insurance agent. Tell the owner not to accept a copy of the insurance certificate from the contractor as they might have stopped making payments on a policy and it might no longer be valid. They need to receive current confirmation directly from the agent. That will give the owner the assurance that the contractor they are hiring is fully insured.
With that, you also need to explain to the owner what their liability could be if the contractor they hire isn't covered. Accidents can happen on a worksite, and when you explain to the owner that they might be held liable for injuries at their home, or any accidental damage to their home, they will understand the importance of only hiring a licensed and insured contractor.
If I were still building jobs, I would consider asking my agent to send a copy of our insurance coverage to every owner after a sales call. (And offer to pay for that service if necessary.) Make it an automatic event, and tell the owner they'll receive a copy of your coverage in the next day or so. If the other contractors are operating legitimately, they can provide the same info to the homeowner. If they aren't, they'll be put in the awkward position of explaining why they don't have insurance.