During a recent commute, I passed by a billboard promoting a golf tournament at a somewhat local country club.

Nothing out of the ordinary, but what caught my eye was the hole-in-one prize – a brand new, 2011 Corvette. Being a big Corvette fan, this naturally got my juices flowing. And being that it’s mid-May and I still have yet to even attempt to play a round of golf this year, this was beginning to get me motivated.

But after passing by the sign, I thought about where the tournament was taking place. This is a former private course which only two years ago, during the deepest depths of the recession, went public…obviously because they were losing money. So how is it they have the money now to put on this tournament? Not to mention, how do they have the money to be able to give away a $50,000 car?!

I understand the tournament, while charity based, is also a tool to help promote membership with the club. And granted, they only have to give away the car if a hole-in-one happens, but what if it does? That’s basically $50,000 they have to pony up! I’m sure the entry fee from the participating golfers doesn’t approach that amount! And let’s face it, the hole-in-one prize is usually the biggest draw to the tournament, especially if you’re not playing the tournament with your regular golfing buddies. So the prize has to be worth-while to draw participants. So what to do? How can they afford to pay that out? Well, the same way everything a person can’t afford gets paid out…insurance.

I’m sure most people know that just about any large prize in contests such as holes-in-one, half-court shots and the like, are insured. An NBA team doesn’t want to just pay some lucky guy sitting in the stands $100,000 because he made a basket, especially one that is, relatively anyway, not all that hard. So instead, they can pay an insurance company $100 per shot (41 home games for a total of $4,100) just in case someone does make it. Not bad, right? $4,100 covers them from having to pay out the grand prize. And if no one makes the shot, then they had a helluva season long promotion for only $4,100! Chump change for an NBA franchise!

The same system works in golf tournaments. If you’re putting on a golf tournament, you don’t have to raise $50,000 to cover the cost of your hole-in-one prize. You simply have to take out an insurance policy. And the rates, like all other insurance rates, are based on risk. And being that the odds of making a hole-in-one are what they are…the risk is pretty low. So believe it or not….you’re not paying out all that much!

Think of it this way – You’re a 40-year driver, with no accidents or tickets, driving a Hyundai Santa Fe (according to AOL Autos, the least expensive car to insure) – chances are, you’re insurance premium is going to be a hell of a lot less than that of the 17-year old kid driving a Mustang, right?

So when tournament time rolls around, there are a number of companies who will be happy to take your money based on the odds of a hole-in-one (anywhere between 1 in 12,000 and 1 in 45,000 depending upon the basis of the odds). You can find said companies with a simple Google search of “Golf tournament prize insurance.”

Lets say your tournament features 140-150 golfers. Even at the lowest odds, chances are that prize is not being paid out. This is why some of these insurance coverages can be had for as low as $250-$300. Maybe even lower if you take the time to do the research and call around.

So maybe this putting on a golf tournament thing is not as costly as I had once thought. If the course itself is putting the tournament on and the insurance on the grand prize as well as a few other smaller prizes is relatively inexpensive, that really only leaves food and drinks. And by the time the players pay their entries and local and corporate sponsors put in a few bucks, I can see how money is made for a good cause and the chance for a course to gain a few new members can certainly happen.

Now, the trick for me will be to come up with the money to take a few lessons to get my “par-3 swing” right, come up with the money to enter the tournament, get a day off from work and beat those 45,000 to 1 odds at just the right time to drive home in a brand new ‘vette! Do you think there’s some type of insurance to cover my expenses?

Swing ’til you’re happy!