Prize coverage for charity, other events gets a hole-in-one

By Debbie Oberle | August 20, 2007

Limited risk, low-cost for insurance lets the fun and games begin on the course

Whether for fun or fundraising, hole-in-one insurance has become a standard insurance coverage on the links for many golf outings. The hole-in-one event can be for a local school raising funds for uniforms or a for large charity raising funds for a cure. In either case, hole-in-one insurance is used to entice golfers to play and to gain sponsorship funding. Who doesn’t like the idea of playing golf and winning a new car, bringing notoriety to the event and the winning golfer?

How does hole-in-one insurance work? It is a simple concept; the average golf course has four par 3 holes, ranging from 100 yards to 200 yards. Those are the holes insured for hole-in-one prizes. Typically there is one grand prize, such as $10,000 or $20,000, and three bonus prizes for the other three holes. The golfer gets one shot at each of the par 3s during his or her round round, and if it goes in, the person is a winner. The claim is processed using provided claim forms, and the winner receives the prize within weeks.

Golf Digest, a golfer playing 5,000 rounds in his or her lifetime, (100 rounds per year for 50 years) the odds are 5,000-to-1 of getting a hole-in-one. When it comes to hole-in-one insurance, insuring a given hole, on a specific day for a specific number of golfers, the odds are higher — 20,000 to 1. Depending on the length of the golf season and the popularity of the sport in a given area, the number of policies written per state can be 1,000 to 5,000, with about 3 percent or fewer claims occurring per year.

Low-cost to insure
Based on the odds, it is easy to see why anyone putting on a golf outing might wish to purchase hole-in-one insurance — it’s very inexpensive. The premium is based on the value of the prize, the length of the hole and the number of golfers shooting at the hole during the event.

For example, an average cost for an outing offering a $10,000 cash hole-in-one prize on a 165-yard hole for 100 golfers is approximately $225. That includes bonus prizes for the other three par 3s, usually valued at $500 each; prize signs so the golfers know what they can win; shipping for the signs; and the one day insurance policy.

If the event has more than 100 golfers, a shorter hole-length or a higher prize value, then the premium goes up. If the event has fewer golfers, a longer hole-length or smaller prize value, then the premium goes down.

Typically the only additional information needed to secure insurance is the name and date of the event, the golf course name and location, and the hole number that is insured. Most of that can be obtained from reading the event registration form.

An organization putting on a golf outing will use hole-in-one insurance as a sponsorship opportunity to raise extra money. The opportunity comes from selling the sponsorship for more than the $225 premium. The perceived value of the prize is high, for example $10,000, so the sponsorship amount can be $750 or $1,500, three to four times the value of a what someone would pay to just sponsor a hole. That can quickly add profit to the outing, taking less time to secure than it takes to solicit additional hole sponsors.

What prizes or shots can be insured?
There are many options for the grand prize: cash, cars, boats, trips, scholarships, just about anything you can put a value on. Cash prizes are the most common, but any grand prize, up to $1 million, can be insured.

There are also policies to insure putting, chipping or sand shots. The concept is similar, but because the distance is so short, and thus the golfer has a better probability of sinking it, the number of golfers allowed to attempt the shot is usually less.

For example, a putting contest for $10,000 would allow one golfer one shot at a 50-foot putt. The premium on that would be in the $350 to $400 range. Again, varying the distance, the number of golfers and prize value will raise or lower the premium. Shoot-outs for $1 million also are insured, but because the value is so high, it is usually a small number of golfers shooting 165 yards for about $190 to $200 in premium per golfer.

The cost of hole-in-one prize packages varies from one hole-in-one insurance company to the next, because many offer extra incentives such as high-valued bonus prizes, shorter lead time, customization of signage, etc. So finding a company that has the ability to suit the outing’s needs gives the event planner the “best odds” to secure business for the next event.

Debbie Oberle is president of TPI Golf Inc., a golf outing specialist company serving the golf industry since 1994. Contact: 800-988-0087,

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Insurance Journal West August 20, 2007
August 20, 2007
Insurance Journal West Magazine

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