"How Does Hole In One Insurance & Prize Coverage Actually Work?"
By securing hole in one contest coverage (also known as hole in one insurance), you have a prize indemnification provider (e.g. US Hole In One) assume the risk associated with offering a valuable prize at the hole in one contest in return for a modest fee. Consequently, when you get coverage through US Hole In One, if you have a hole in one contest winner, we become fully responsible for paying out the prizes.
A Simple Example: XYZ Foundation
The XYZ Foundation is running its annual golf outing with 100 golfers. They decide to hold a hole in one contest on #5, a hole that measures 163 yards. Any golfer who successfully makes a hole in one there will be awarded $10,000. Prior to the event, XYZ purchases a contest coverage package from US Hole In One for $262. When John Doe and Jane Smith both make an ace at #5 during the event, they are both awarded checks for $10,000. However, because XYZ Foundation purchased hole in one coverage, US Hole In One writes the $10,000 checks. Total out-of-pocket cost to XYZ Foundation: only $262.00.