Hole-In-One Insurance: Behind the Scenes of a Golfer’s Moment of Glory

We like to be informative on this blog about different types of insurance and the many facets of life that relate to your coverage. But sometimes we just want to talk about sports. Back in the fall we wrote how pro sports owners insure the huge contracts they dole out to players.

Today, since its the dead of winter, lets talk about golf, specifically hole-in-one insurance. And yes, it is exactly what it sounds like it is.

If you’re privy to the golf world, you may be well aware of this but for others it may come as a surprise. Sometimes a golf course will hold a contest or a tournament and offer a huge prize – cash or a vehicle usually to any participant hitting a hole-in-one during the event. You ever wonder where the organizers of the tournament get the money to shell out for such a prize? It’s not just from the increased revenue generated by the buzz from the prize offering. Well, that is a big part of it. But if that were all there was to it, by giving away such a prize they would likely be giving away most of, if not well beyond, the events entire revenue, right? Back to square one if not ending up in the red?

Nope. Hole-in-One insurance.

There are entities which offer coverage in the event of the calamity of someone actually hitting a hole-in-one at one of these events. The sponsor of the tournament buys the insurance and is reimbursed if they do give out a prize. Somewhere along the line, some insurance adjuster concluded that the odds of a hole-in-one being hit by an amateur – about 1 in 12,500 – was not highly likely, but likely enough. Insurance is all about “what if?”

The cost of hole-in-one insurance ranging from less than $200 to well over $1000 depends on the number of participants, the size of the course, and the amount/value of the prize being offered/insured against. Most companies offering hole-in-one coverage will not insure on a hole less than 130-150 yards long. Often a stated number of witnesses are required, usually no problem with the crowds such events are designed to attract. It is normally required that all participants are amateurs. How they prevent ringers from flying in under the radar is anyone’s guess.

There is a funny origin story to hole-in-one insurance. Tradition mandates that a golfer who connects on a hole-in-one is obligated to buy the group he is golfing with a round (or many rounds?) of drinks afterwards at the so-called 19th hole. So golfers started paying a small fee which would cover a larger bar tab in the event they pulled off a hole-in-one. If disaster struck, a possibly once-in-a-lifetime sporting accomplishment, they’d be set. Funny, because with all other insurance, you’re paying against the occurrence of something you do not want to happen. Yet you would only buy hole-in-one coverage if you thought you could actually do the deed, right? Have you ever accidentally hit a hole-in-one? Ideally every hole would be “-in-one” wouldn’t it?

Anyway, all this hubbub over the hole-in-one led to the prizes for hitting them that are more common today, followed soon after by insurance upon them. Apparently no one thought of making that specific type of insurance an industry unto itself until the early 1990s when Mark Gilmartin, then in the business of repairing broken golf clubs, started Hole-In-One International. Now there are many such companies. They’ve spawned a sub-genre!

Gilmartin and like-minded pioneers would expand into ‘prize indemnity insurance’ insuring other events like the half-court shots taken by basketball fans for a prize, as well as promotional prizes for guessing the weight of giant pumpkins, or the number of jellybeans in a jar. Today some major insurance companies offer hole-in-one insurance along with the more commonplace insurance offerings.

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