Golf enthusiasts who organize hole-in-one contests require a specialized type of golf insurance. That’s because hole-in-one prizes often range from $100,000 to one million dollars.
Average premium rates for hole-in-one insurance comes are calculated based on probability and payout factors.
Probability Factors for Sinking a Hole in One
The length of the hole for the hole-in-one contest is a major factor in predicting if and when a golfer will sink the coveted shot. Typically, the minimum distance for a shootout contest is 165 yards.
The number of golfers participating in the contest is another critical factor. The number of attempts each participant is allowed also directly impacts the probability of shooting a hole in one. If 100 contestants are allowed only one shot, their probability of success triples if they are allowed three shots in another competition.
According to a 2008 study from US Hole in One, the probability of an average golfer successfully making a hole-in-one shot is one in 12,500 tries. A professional golfer is five times more likely to sink a hole in one; a pro’s probability of success equals one in 2,500 tries. This is why many application forms for hole-in-one insurance exclude pro golfers.
Payout Factors for Hole-in-One Prizes
The larger the grand prize for sinking a hole in one, the greater the premium required to insure a greater financial risk.
But there is a catch. Not all hole-in-one prizes are payable all at once. It is common for a million-dollar prize to be paid as an annuity over a period of 10, 20 or even 40 years. With a claims payout as low as $25,000 per year, this also lowers the required premium significantly.
Hole-in-One Insurance Premium Rates
Below are sample premium rates from a major U.S. insurer for sinking a hole-in-one on a 165-yard hole. Only amateur golfers are allowed to compete for the golf insurance prizes shown.
- US$250,000 cash grand prize ... $600 premium (4 tries per contestant)
- $100,000 cash ... $200 premium (2 tries)
- $100,000 cash ... $100 premium (1 try)
- $1 million payable as 40-year annuity ... $600 premium (1 try)
One Canadian broker specializes in smaller hole-in-one prizes, although customized quotes for amounts greater than $50,000 are available.
- Up to C$5,000 cash grand prize ... $165 premium per hole
- $5,001 to $10,000 cash ... $245 premium
- $10,001 to $15,000 cash ... $345 premium
- $15,001 to $20,000 cash ... $445 premium
- $20,001 to $25,000 cash ... $545 premium
- $25,001 to $30,000 cash ... $645 premium
- $30,001 to $35,000 cash ... $745 premium
- $35,001 to $40,000 cash ... $895 premium
- $40,001 to $45,000 cash ... $1,260 premium
- $45,001 to $50,000 cash ... $1,360 premium.
Organizers considering insuring a super prize indemnity for shooting two holes in one during a full 18-hole golf course can rest easy. Odds of an average golfer sinking two holes in one during a single round are one in 26 million. For back-to-back hole in ones, the odds of paying the prize indemnity are one in 156 million.
Claiming a Hole-in-One Prize
Winners claiming a hole-in-one grand prize may have a much harder time. Insurance companies often demand video evidence of the feat plus sworn witness statements. For prizes from $100,000 to one million dollars, two non-event witnesses are required one of which must be a police officer or a Professional Golfers Association (PGA) official.
Insurers also reserve the right to thoroughly investigate golfer claims and credentials, to ensure that no professional golfers were among the contestants.
One insurer’s application form even requires applicants to agree to submit to a lie detector test.
Sources: This article presents independent calculations and insights based on data from US Hole in One and J.D. Smith Insurance Brokers.
Daniel Workman - A senior business and finance writer who also does French translations, notably international trade and insurance materials.
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