Turning Water Damage Prevention Into a Trust Business

Pete Miller [00:41]: Welcome to Predict & Prevent! I’m your host, Pete Miller, CEO of The Institutes, and today we’re joined by Paul Vacquier, founder and CEO of Beagle Services — a company on a mission to transform how we think about water damage prevention.

Paul’s journey is anything but conventional: he went from practicing law to building the insurance and partnership strategy behind the Flo by Moen smart water shutoff valve before launching Beagle Services to solve what he saw as a critical gap in loss prevention market.

In this episode, Paul breaks down why getting this technology into homes is only half the battle — and why 30 to 50% of installed devices may not actually be protecting the homes they’re in.

We’ll explore how Beagle’s full-stack service model is building trust with insurers, agents, and homeowners alike, and why water damage — the most frequent preventable cause of homeowners’ claims — is driving a fundamental shift in the market.

Paul shares a sobering example of a $900,000 claim that all came down to a device that simply wasn’t plugged in. Which raises the question: if the smart device installed to protect your home isn’t connected, are you really protected?

Pete Miller [01:59]: So, Paul, tell us about your background in water damage prevention and really kind of what led you to start Beagle Services.

Paul Vacquier [02:06]: Yeah, it’s a fun background because it doesn’t make much sense when you figure out that I’m actually a California-barred attorney, but now I run a multi-state plumbing company.  I was fortunate enough at the beginning of 2018 to be looking at different projects that I would be interested in working on. And I was caring less about what the actual product was and more about the team and the people that I would be working alongside. And I had a previous relationship with the founder and CEO of Flow Technologies. And they had just raised their Series A and were looking at growing the team and reached out. We were able to connect and I started working at Flo Technologies at that time. I’ve helped build out that insurance and partnership path to market for the valve, which ultimately led and helped lead to the acquisition of that business by Moen. So that is the Flo by Moen valve now in market.

While I was building that out, we had a dramatic need for scaled installation. So anytime there was a partner that needed to have the valves installed to help benefit and prevent water damage, they were looking for how to help install those at scale. And that’s what the genesis of Beagle was. How do you find a trusted partner that will show up at a scheduled time, that’s non-commissioned, to ensure that the work being done is done appropriately and can be done with trust that the person interacting with the client is ultimately one that’s not going to be driving a hard sell or will actually show up and all these various points that were challenges in the installation environment.

So that was the original thought in genesis around Beagle was how do we create a trusted platform for the deployment and installation of these technologies at scale because they help. And so how do you get more of them out in the market?

Pete Miller [03:55]: Well, Paul, as a person who travels a lot and is a customer of Flo by Moen I’m very grateful I actually have one in my house and thank you for doing that because that gives me a sense of comfort quite honestly while I’m traveling

Paul Vacquier [04:10]: Well, that’s great and I wonder if Beagle was the one that installed it for you.

Pete Miller [04:14]: You know what, that’s a good question. I honestly, I wish I could say yes, I’m not sure, quite honestly. My wife took care of that to be right up front. But I know why we have it and it is a sense of comfort because not there a lot, right? So yeah, so you kind of touched on this, but you saw a gap in the market different than others. So can you just sort of drill down on that a little bit and, you know because I think most people see water damage like I frankly did as a technology problem, right? And you kind of saw that, but then you saw another gap.

Paul Vacquier [04:49]: Well, the first problem is really in the original cause and kind of sourcing of the water damage issues. And that is now you have a lot of aging infrastructure and component pieces that are maybe not as manufactured as well as they could be, or they last longer than they’re intended to be lasting on a property. And so you have a demand, or the plumbing market, is currently predominantly retroactive. So you’re not calling a plumber until you have an issue and then they’re coming to help fix that issue.

But with the advent of the technology, the technology is excellent and it does help prevent those leaks from occurring and notifies you of when those leaks do occur. Now the challenge is technology works, but how do you actually get it installed? And we used to at Flo, now Moen, we would call local plumbers around the country once we had a client interested in getting the technology and would try to figure out what the best price was. We could get the client, help the client schedule and really try to provide a white glove service for them. But bridging that from the sale of the technology, managing the third-party installer to then ultimately helping the client. That was very challenging to do at scale across kind of a non or a contractor labor force.

So, Beagle saw that problem as really a trust issue. So how could a partner or a client trust that the person coming to the home was capable of interacting with the technology itself, meaning, you know, enabling the Wi-Fi, provisioning the product to the home to make sure that once they do the installation, it is actually protecting the home and then ensure that they are going to show up when they say they’re going to show up. It’s an issue of how do they prioritize their time from a revenue perspective. And if you are driving to a $400 job that was scheduled two weeks ago and you get a phone call from somebody saying, my water heater just went out. You’re going to divert and go do a $2,000 job, not a $400 job.

So, we wanted to ensure that we could provide trust to our partners, meaning insurance carriers, insurance agencies, valve manufacturers, that when they wanted to deploy the technology at scale, they could have a plumbing labor force that they could trust would show up when they said they were going to show up, would treat every client regardless of socioeconomic level or what car was in the driveway or what ZIP code they were in, treat them the same. And then be able to perform that work and technologically provision the valves at scale. So, it became an employed labor force of plumbing professionals focused on this market niche specifically because of that installation gap, really.

Pete Miller [07:35]: So, you talk about like a full stack services business, right? And my background’s IT, so I’m used to the full stack sort of terminology, but what does that mean? And sort of how does that differ from other plumbers installing devices?

Paul Vacquier [07:51]: Yeah. So, there is a real journey around how the clients are interacting with their home plumbing system. And like I mentioned, the originally and kind of the existing market is you call a plumber when something is wrong, or you want to do an upgrade to your home. You want to have a new bathroom sink or a new shower or remodel that kind of thing. So, most instances, it’s a reactive call. We, with the technology believe that the whole market can shift from reactive to proactive.

So from a full stack water damage prevention standpoint, what we mean is that when somebody’s interested in helping prevent water damage at their home, which should be everybody, there is people, most people think, it’s not going to be me, but it is the most frequent preventable cause of homeowners claims. So, we would find that we can get out there and do an installation, which is the first step really in helping them prevent water damage. And usually when you’re there, the client is asking you questions around other ways that they can be helped, or you’re able to very easily see your existing water shutoff valve doesn’t work. So, to the extent that anybody had ever exercised the valve or hadn’t exercised the valve, maybe you can’t actually shut the water off even if you did have a leak.

So, there’s the ability to, once you’re present and you have an expert on site, You can really help on, prevent ongoing damage mitigation services to the client. So get there and sell a valve. Now the valve tells you you have high pressure. What does that mean? How do you fix that? You can come back and put a pressure regulator on the valves, tell you, you have a small drip. Do you need help finding it? Do you need help fixing it? Now you can get out there and replace leaky fixture and appliance supply lines. It’s usually a toilet or an ice maker, that kind of thing. And you can really get in front of these issues that the valves are alerting you to way before they become more of a catastrophic or critical issue. And that’s what we mean when we say full stack. So, it’s the installation, it’s ongoing monitoring, and it’s resolution of issues that could cause water death.

Pete Miller [10:03]: You know, Paul, I mentioned I’m a customer. And it’s because I was what you just said. was like, it’s never going to happen to me right up until my water softener blew up when I wasn’t there and I had a flooded basement. So that is why I get it. And that full stack is certainly a super interesting approach. A lot of the people that listen to this are in the insurance industry. I think you’ve covered something pretty interesting in working with insurance carriers. So, can you tell us about the data gap you discovered around these devices?

Paul Vacquier [10:36]: Yeah, certainly. We, talked about the installation gap to start, which was, okay, there’s this technology that really helps. Now, how do you get it out there and deployed? And that was the first problem that Beagle was helping solve was how do we make sure that these technologies are deployed correctly out in the field and installed?

The next piece is how do you help a homeowner continue to live with the product and ensure that they are the continued protection is there for the insurance partner. And so we built out a product called Watchdog, whereby we’re able to ingest the alerts from multiple valve manufacturers to help the clients troubleshoot existing issues that they have that the valve is detecting. The small drip example I mentioned. If a valve tells you you have a small drip, Beagle can see that through our Watchdog product and we can help you fix that issue. That was the genesis.

Now the gap that we discovered was how many of devices that were actually installed aren’t actually online. And that became what we call now the protection gap. So there was the installation gap. And if you could even clear the installation gap and get it correctly installed, when you’re gone for two months at your secondary in Arizona, and then you come back home and you jump in the shower out of the airport and the valve shuts you off. How do you prevent the client from getting upset and unplugging the valve? So, we found a lot of systems, sometimes between 30 to 50% of installed devices are actually offline.

And that was something that I don’t think anybody expected to be as big as it is, but it’s really just a byproduct of us being able to continuously connect and provide ongoing support to the client base so that they know, well, hey, I just reset my Wi-Fi password. Now I need to make sure that I am re-provisioning my system to the new Wi-Fi. Or, you know, I unplugged it because I’m upset about it. And I just need to learn a little bit more to help my, my comfort level and plugging the system back in. But it was really the, um, the protection gap, as we’re calling it, where you have the devices that maybe are installed, but are not actively on and protecting the home.

Pete Miller [12:47]: It has to be connected to work, makes sense. So you said that trust sort of is at the core of your founding. So what trust problem were you solving and why did you choose an employment model over a contract?

Paul Vacquier [13:01]: Yeah, it’s a great question. When we first started the business, I wanted to make sure that the partners, the insurance carriers and agents and the manufacturers who were referring us to the work because they needed the installations done, would know and trust who was going to the property. And that’s frankly why we named the company Beagle was because we wanted it to stand for trust. And if you’ve ever had a Beagle or been around them, they tend to be alarming and alarmist to danger. So, the team has taken that to liking to sniff out leaks. So, we wanted it to stand for that trust and that alarming component where we’re able to then help the clients find those leaks and those issues.

But we wanted to ensure, like I mentioned, that the client would know that we would show up, that the client would know that we were only there to do the work that was requested, meaning the valve install in most cases, or the valve install plus maybe a water heater inspection or whatever it is we were there for as an extension of the carrier or the broker or the manufacturer. That they would know our guys wouldn’t, you know, treat the client differently or try to drive a commission sale or anything like that because of the employment model. So that’s, and beyond that, when you think about the installation of the system and then it shuts you off the next day, were they able to train the homeowner on how to use the app? Were they able to then go back to the property and make the time and take the effort to help the client find the leak? So how do you create more of an ongoing and trusted relationship with the client? Because you are acting as an extension of the partner in most instances.

Pete Miller [14:41]: So just, so Paul, the partner is the insurance company and the client is the homeowner in your parlance, is that right?

Paul Vacquier [14:47]: Yeah, in most instances. We only operate from a referral model. So Beagle is referred to all of our customers. We don’t have any direct marketing to consumers. So that is an insurance carrier. 90% of the time, our clients are referred to us through a partner, meaning either an insurance carrier, an insurance agent, or a manufacturer of a product.

Pete Miller [15:08]: So, you said you’ve seen homes fall out of escrow because buyers couldn’t get insurance without these valves installed. So, what does that tell us about where water damage prevention is heading?

Paul Vacquier [15:19]: Yes. Water damage is ubiquitous. It’s across every single property type and anywhere there is a pressurized water system or even non-pressurized water system. So when you think about homes falling out of escrow, largely homes have mortgages and a home that has a mortgage has to have insurance as a condition of that mortgage. And in order to sometimes get coverage, you have to have a valve installed. So in a few instances, we’ve been asked to go put valves on homes to ensure that the insurance condition is met for the mortgage.

There have been a couple of instances where that hasn’t been possible because of homeowner preference or lack of the ability for them to allow us to put the valve on the home, at which point there is no insurance on the property, at which point the mortgage has not closed and then fall out of escrow. So we’ve seen that a couple of times.

And really, I think that’s an indication of the importance of the systems and the belief around the proof in the market that they are effective at preventing loss. But if you can’t get insurance without a system, that causes you to not get a mortgage, which then causes you to not buy a home. That’s a pretty intense set of chain of events there that shows, I think, the importance pretty dramatically of the systems and of the technology.

Pete Miller [16:42]: That’s a really strong signal, right? I mean, that really is. That’s a really good anecdote. So you’ve written, and I’ve read your writings, about how technology transfers insurance agents into risk advisors. So how do you see that relationship between insurers, agents, and homeowners kind of evolving around risk mitigation?

Paul Vacquier [17:02]: Yeah, I think you have a real unique transition in the market happening where there’s really what people have also said is like an unbundling of insurance where historically you were able to look at a client and the property and the cars and everything and figure out what a holistic product would look like that would meet your underwriting requirements and guidelines. And with the introduction of modern technology across auto telematics, home telematics, security systems, fire suppression, increasing changes in weather patterns and issues that cause catastrophic losses. You have a lot of specific and niche coverages that start coming up.

Now that allows the agent to create custom solutions for homeowners that better suit that client’s needs. So you can still find a fully bundled offering for a client, but that might not be the best thing for the client in those instances. And that’s where the agent is really coming into the market and saying, hey, it might be harder for you to get coverage in California because of your wildfire exposure or in Texas now because of freeze exposure or in the Midwest or the central part of the United States due to wind and hail. So if there are certain exclusions – and on the East Coast, we can talk about the hurricanes and floods and things like that – but when you think about how the agent can now approach that client with a very unique and custom tailored set of policies or circumstances to make them a better risk for the insurer, that’s a really unique position for the agent to be able to provide that value that historically has been, I think, less around risk mitigation and advice and more around just like, here’s a great program for you. This one’s cheaper than that one, but they’re offering more or less the same coverages. Coverage can really be sliced and diced specifically for that client, which allows great advice and excellent client retention and relationships between agents and customers.

Pete Miller [19:10]: Couldn’t agree more. I mean, the way we kind of try to say it is the best loss is the one that never happens. And that’s all front-end mitigation, right? And the technology, like you’re suggesting, I think that I couldn’t agree with you more.

Paul Vacquier [19:22]: I learned this thing yesterday and I love it. And that was we want to go toward 0 % frequency because without frequency you don’t have severity. So how do you, so how do you eliminate the frequency? Because without frequency, there’s no severity. I love that.

Pete Miller [19:40]: Paul, I’m going to use that. I’m going to shamelessly steal that from you. That’s a nice…

Paul Vacquier [19:46]: You should. Like I just did. was like, somebody else told me that yesterday and I was like, zero percent frequency is zero percent severity. And I was like, my, that’s so wonderfully simple.

Pete Miller [19:55]: So what a great job you’ve done. So if you look ahead, what’s next for Beagle Services? Do you see the company expanding into business properties or managing other kinds of risk sensors?

Paul Vacquier [20:04]: Yeah, really we’re focusing on water. So however we can help the client prevent water damage, the better we’ll continue to grow and continue to help provide that service. So one that’s expanding territorially because this problem, like I said, is ubiquitous across anywhere there is water. Also being able to lean into things that are adjacent to this space, but really helpful in the same issue around water damage.

So how do you do leak detection and leak location? How are you doing helping with flood prevention? Other types of sensor deployments that can help with, you know, flood and drainage loss, sewage backup, all of these other things where there is a water-related damage claim that’s independent from just the supply side within which Beagle currently specializes in. So it’s a continued growth of just the physical focus and footprint of what we’re doing.

But every day we’re asked by clients to help them provide some other service as it relates to water damage prevention, filtration, easing, updating fixtures and appliances, all of this kind of thing that Beagle is able to help with and will continue to help our clients with that will continue to de-risk the properties.

Pete Miller [21:18]: Paul, you mentioned that devices somewhere between 30 and 50 % could be offline at any one time. Do you have any specific examples of the impact of that?

Paul Vacquier [21:26]: And those are the worst kinds because everybody feels that they should be protected or that they are protected. And the carriers are underwriting a lot of the time to the valve being installed and actively protecting the home. And I’ll get phone calls and pictures and things wondering why there was a loss at a certain home when there was a valve installed. And it pains me when, and there’s a specific example where there was a $900,000 water damage claim. It was a toilet supply line on a third story that broke and water flooded for multitude of days. And it caused water to drain all the way down to the bottom and to the basement of the properties. A $900,000 claim.

We looked at the pictures of the installation together with the carrier. It was not an installation Beagle did. We looked at installation pictures with the carrier and there was a valve present, but you could clearly tell that it was not plugged in. The valve was just sitting there installed on the home, but it was not plugged in. And everybody had assumed that the home was protected and it was not because the valve was not powered. And that’s $900,000.

Now, say that toilet supply line had leaked, but the valve had been online, you might have had some water spillage until the valve shut off. But multiple days of water running all the way down three different stories and ultimately causing a $900,000 claim is just, it’s painful, right? When it’s as easy as a plug. Um, so instances like that really, um, shine a light to me on just how, how do we make sure we can reach out to clients proactively and help them ensure the valves stay on and protecting the home? Because that’s false sense of security that the client has, but also the carrier has, um, is really awful in that instance. So that’s one that really stands out in my mind. But there are a few like that I could…

Pete Miller [23:15]: Yeah, the ROI on making sure that’s plugged in is pretty high on that example, right?

Paul Vacquier [23:20]: Think of the number of systems that could be installed just for that claim cost alone in that instance.

Pete Miller [23:27]: Plus, as you say, the underwriting factors assume that it’s online and then it isn’t. And that’s a whole other thing,

Paul Vacquier [23:33]: Yeah. Well, when you think about, I mean it’s an unintended pun, but that is the term premium leakage where you’re underwriting the home, assuming that it does have a valve online. So, you’re offering a lot of the time, a client, a premium discount. And now you’re losing that added premium because you’re expecting the home is protected, but then you have a claim that can be catastrophic. And so, you’re taking less premium for the same risk. And then you have a major claim.

So there are instances where that is the premium leakage component is something that I think really stands out and is highlighted by the Watchdog data we have around that 30 to 50 % of systems being offline.

Pete Miller [24:14]: And the value of the Watchdog system, as you’re saying.

Paul Vacquier [24:17]: Yeah. Well, one of the things that’s really interesting about that component that happened in this lab this last winter was we were able to see, we knew whether it was coming. look at Dallas, you look at Nashville, you know, whether it was coming. And we were able to look at our installed devices, figure out whose valves were offline, reach out to them and say, “Hey, you know, bad weather’s coming. Your valves offline. You want to put that thing back online to help prevent type of water damage issue from occurring.” And we were able to proactively reach out to folks and help them with that.

And like I mentioned, some of it was as easy as people saying, yeah, I changed my Wi-Fi password and never read and never reprogrammed the valve, reprovisioned the valve or, it upset, it upset me because I shut me off on the shower. So I unplugged it. Okay. Well, here’s how you can retrain it as before that weather comes to ensure that you are protected when you are going to be at a greater risk as you know, you have three days of single-digit temperatures in a place like Nashville that’s not used to that. Now we’re getting more used to Texas freezes, but still being able to protect those properties and those homes, being a paramount when we’re trying to achieve.

Pete Miller [25:23]: My sister lives in Lubbock and a few years ago they had the freeze, and out of her house for three days and now she’s a customer.

Paul Vacquier [25:]30: Exactly right. Exactly right. And you wish that they would become, everybody would become customers before the next one, right?

Pete Miller [25:40]: Yeah, exactly. Paul, thank you very much. I really appreciate it. Very fascinating.