March 2023 – UPHCA

What does it mean to be locally owned and operated? What is the difference to the public and local economy? Is it a benefit to the consumer? When a large box store moves into an area what does it do to the local businesses? Where does the profits to the big national stores or operations go? These questions and others are evaluated by the local communities and experts all the time. However, you the consumer what is your thoughts on this?

Many of the local businesses are your neighbors or who employ your neighbors or friends. These local businesses support the local economy in so many ways. It seems that the trend in business is buying up smaller companies and managing all of them as one large multifaceted corporation. In some situations multiple companies in the same market are owned by one company, however they retain the former name. With this type of market approach, it can affect the consumers experience. “Buyer Beware” is the phrase that we should remember and consider. But how do we know which companies have taken this course of action? Here is a list of local companies that have been purchased by large ‘venture capitalists’ corporations who look to expand their reach into a local market and in turn increase their bottom line. Increasing the bottom line isn’t a bad thing at all, however when taking an unfair advantage of the markets and consumer it goes back to the phrase – “Buyer Beware”. We’ll let you decide!

Here are a few examples of what is happening in Utah.

Knox Lane: https://www.knoxlane.com/

Any Hour (Utah)
Black Diamond Experts (Utah)
Bumble Breeze Plumbing Heating & Air
Penguin Air (Phoenix)
AC by J (Scottsdale)
Advance Home Services (Southeast Idaho)

Friendly Group: https://friendlygroup.com/

Friendly Home Service
Just Right Heating & Cooling
Western Heating, Air, Plumbing
Main Street Heating & Cooling, Plumbing

APEX Service Partners: https://apexservicepartners.com/ – alpineinvestors.com

Whipple

Bestige: https://bestigeholdings.com/

Craigs Services
Comfort Solutions
Comfort Construction Services
My Buddy the Plumber
Same Day
Walker Plumbing
Superior Water & Air
ICS – Intermountain Comfort Supply
Lee’s Heating – Air Conditioning – Duct Cleaning – Water Treatment
Comfort Construction (HVAC)
Utah Engineering (HVAC, Plumbing) (Commercial)
Beehive Plumbing

TurnPoint: https://www.turnpointservices.com/

Scott Hale Plumbing & Heating

American Residential Services (Charles Bank): https://www.ars.com/

YES! (Formally ESCO and Rescue Rooter)

The Plumbing Industry, it seems, have a few unethical companies who are receiving ‘referral fees’ from some restoration companies. Below are comments from a respected restoration company who is also a ‘Qualified’ member of the UPHCA sharing their insights.

Plumber referral fees are now possibly up to $1500 with certain restoration companies that give referral fees. The average mitigation job is approximately $3000 and these restoration companies are putting their referral fee amounts into the estimate for clients. These restoration companies are “fluffing” their estimates to cover the cost of the referral fees they are giving out. This can be costly to homeowners and insurance companies. The homeowners and insurance companies end up paying for the “fluff”, causing a snowball effect for anyone involved in the insurance industry, including the homeowners.

There have been several instances where the homeowners could have avoided putting in a claim with the true cost of the services under their deductible, but the “fluff” in the estimate pushed that homeowner to have to put in a claim, due to them not being able to cover the full amount of the mitigation and/or repair costs. There are also instances where a homeowner has a high deductible or there is no insurance coverage on the type of damage that occurred. Even on these type of claims, the referral monies are still hidden in the estimate. Homeowners have to pay out-of-pocket for the services in these cases, which could very well cause a hardship for the homeowner. Homeowners could also have issues with renewal of their home insurance policy, because there may have been claims put in that didn’t necessarily have to be a claim. There have been many claims that could have cost less than the homeowners’ deductible, but due to the referral fees, the cost of the mitigation or repairs became more than their deductible. This causes the problem of the homeowner having possible issues on renewing their insurance due to the amount of claims being put in under that insured’s home.

Insurance companies also incur these costs, because mitigation can be an emergency service. Adjusters (especially remote) don’t have the time or oversight to be able to protect homeowners or their respective insurance carriers from the restoration companies “fluff” due to the nature of emergency claims.

Overall, homeowners and insurance companies are the affected people that have to suffer the consequences of referral fees. Everyone else suffers too, in which these practices can make insurance companies increase premiums for all insureds.

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