The Surprising Reasons We Need Insurance

With bovine bingo, contest participants select a number from the equivalent of a huge bingo card that has 100 or more numbered squares. Next, as you might have guessed, a cow jogs around this field until she poops. If she poops on your pre-selected number, you could win many hundreds of dollars.

I’ve read that Cow Chip Bingo is popular in the Midwest. As a NYC person, it was new to me:

Cow chip bingo (aka cow patty bingo or cow plop drop) is one of many charitable contests for which organizers purchase prize indemnity insurance.

Prize Indemnity Insurance

It can be pretty expensive if a golfer gets a hole-in-one or someone makes the half-court shot. However, the chances are slim:

But still, it does happen.

One amateur golfer won $1 million for his hole-in-one at a charity event. (He wound up with an annuity that paid $25,000 a year.) During 2021 at the LPGA’s Pelican Women’s Championship, three pro-golfers won 2-year Lamborghini leases. Reputedly, no one expected three people to get the pricey prize.

Because of her 147 yard shot on the par-3 12th, Austin Ernst was one of those golfers:

Recognizing someone could win, event organizers pay a relatively small amount to eliminate the chance of having a huge payout. With golf, the amount depends on whether the participants are pro or amateur, the length of the shot, the size of the prize:

Other events covered by a prize indemnity insurer include guessing the jelly beans in a jar, what the Dow might be on a certain day, and tossing an olive into a martini glass across a bar.

Our Bottom Line: Insurance

Whether it’s our bank deposits, hurricanes, or our health, for each, we can protect ourselves from the cost of a calamity. Unwilling to incur a risk, we can pay someone else to bear it. That someone could be government or a private company. At one extreme we have government providing Social Security to 69 million people. Then, we also have hole-in-one insurance.

My sources and more: Sometimes my Hustle email gives an in-depth look that I cannot resist sharing. Most of today’s facts come from their post. But GolfDigest told me a bit more about winning a Lamborghini. Meanwhile, rather dryly, Econlib tell us all we need to know about insurance.

Originally published at https://econlife.com on May 3, 2022.