Insurance Ratings and Their Effect on Hole In One Coverage
If you've been doing your homework and reading up on the various hole in one insurance providers in the industry, you've no doubt come across many of them proclaiming to have 'A', 'B+' or 'A+' rated coverage backing their contest packages. While these grades may seem simple enough, it is important to understand exactly what they mean. This article will explain the intricacies involved so that you are more informed when it comes time to actually purchasing your hole in one contest coverage.
First, it is important to understand exact what hole in one insurance is and what it is not. Surprisingly, hole in one contest coverage - more commonly known as hole in one insurance - is not actually insurance at all in the traditional sense. For exmaple, if you purchase hole in one insurance for your golf tournament, you are not actually purchasing an insurance policy like homeowners or car insurance. Instead, you are purchasing a promise from a particular company to cover you claim in the event of a hole in one winner. So, even though 100% of the industry markets hole in one coverage as hole in one insurance, 99% of those companies, including Foresite Sports, is not actually selling you a policy.
Now, you may ask, if I'm not purchasing an insurance policy, why the need for an insurance rating system. The answer lies in the coverage these various companies have in place to protect winners. See, while you don't actually purchase an insurance policy for your hole in one contest, the company you are working with should have in place an insurance policy that covers them in case of a claim. So, for example, Foresite Sports will sell you hole in one contest coverage. In addition, Foresite Sports is covered by an actual policy to protect against winners. In the event you have a winner, Foresite Sports will issue payment for the prize, and that payment is guaranteed to take place because of the policy Foresite Sports has in place for protection.
With all of that being said, the need for a rating system comes into play when talking about the strength of that protection. After all, you certainly want the company you're working with to be able to pay for your winner's prize, right? To differentiate between these various protections, several internationally-recognized groups (A.M. Best, Moody's & Standard and Poors) have all created grading systems to inform consumers about insurance companies. They rate every legitimate insurance company in the country on a simple scale to let people know which ones are most capable of paying any claims they may receive. In the hole in one insurance industry, A.M. Best's grades are most frequently seen. Foresite Sports, for example, is covered by insurance companies that are rated 'A+' by A.M. Best. This is the highest grade found in our industry.
Now, say you come across a company that has a grade of 'B+', what does that mean? Well, the grade indicate the ability to pay out a claim. This determination is largely based on the assets of the insurance company in question. Our insurance companies have assets valued at over two BILLION dollars. Companies with lower grades most likely have assets much lower than that. Asset values are important because they indicate the amount of money available for claims. For example, if you made coin-flip bets with you friends in which you could potentially lose $10, but only have $5 in your wallet, nobody would want to bet with you because there is the potential that you could not pay out to a winner. The same idea applies to insurance companies. For our insurance companies, a $50,000 prize is not going to break the bank, so when working with us you can rest assured that any winners you have will recieve their prize in a timely fashion. However, perhaps the same cannot be said for hole in one insurance providers who work with insurance companies with lower grades.
Should you have any questions at all about insurance rankings, grades, hole in one insurance or anything else contest-related, don't hesitate to give us a call and seak to one of our tournament consultants. They are happy to answer any questions you may have.