Why are they unlicensed?
It is not hard nor expensive to obtain a Contractors License – the requirements are to pass a background check and to provide proof of work experience. Which means many Unlicensed Contractors have no work experience resulting in poor work and worse they could be a criminal and you are letting them in your home around your family.
What happens if they get hurt on your property while working?
Must will not be able to secure Workers Compensation Insurance meaning they will be forced to file a claim against your homeowners insurance.