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What Is Insurance In Blackjack?
Before we get into the odds and calculations, let us see what insurance is and how it works.
As a new blackjack player, you will learn how and when to hit, stand, and split, known as the basic blackjack strategy. Meanwhile, you should know how blackjack side bets, especially insurance work. As I’ve said, insurance is one of the blackjack side bets which pays 2 to 1(more on this later). The casino offers you to take it whenever the dealer has an ace showing as their first card. On average, 1 in every 13 hands, a dealer will have an ace up, and if they have a 10 valued card as their hole card, you will get busted since they got a natural or blackjack.
Every time dealer has an ace up, you will be offered an insurance with a 2 to 1 payout. Insurance bet ensures your hand against the potential of the dealer having a blackjack.
The idea is that, regardless of what you have, even if you have a 20, if they have a blackjack, you lose. Or if you also have a blackjack, you will end up pushing rather than winning and getting paid. The casino allows you to ensure your hand with up to half of your main bet. For example, if you bet $10, you can put $5 on an insurance bet. Now, if the dealer has a blackjack, you lose your main bet, your insurance bet wins, and you will get paid 2 to 1 for your insurance. In case you also have a blackjack, the casino will offer you to take even money. This means you can get paid on an even amount to your bet right away before they even check to see if the dealer has blackjack or not. A lot is going on around the insurance and even money, and most gamblers are not aware of that. Let me explain the two, then we can proceed to more details about insurance.
As I have said, gamblers say that insurance is a sucker bet. But ironically, the same gamblers that say this are the ones who usually take even money on a blackjack. I have a piece of bad news for those gamblers: insurance and even money are the exact same thing. Let me show you why this is the case.
Suppose you have a blackjack and the dealer up card is an ace. If you take even money with the $10 bet, you will get paid $10 in both of the following scenarios:
- the dealer gets a blackjack
- the dealer does not get a blackjack
Using the exact same scenario as the setup, you buy the insurance and put $5 on the insurance bet area. If the dealer gets a blackjack, you push on your blackjack and get paid 2 times your insurance bet which is $10. Push is when both of you and the dealer have blackjack, so your main bet neither wins nor loses. But, if the dealer does not get a blackjack, you lose your insurance bet, but your blackjack will get paid 3 to 2 which will be again $10. See? In either scenario, whether you take even money or insurance, you will end up with the same profit. The key here is to understand that even money on blackjack is the same thing as insurance.
Now that you hopefully understand the concept, we can talk some math!
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How To Calculate Blackjack Insurance Odds
There are no exact odds associated with winning an insurance bet. Because your chances of winning vary depending on the game situation. For example, the number of decks used in the game or the number of 10 value cards that have been dealt, can affect your chances of winning. In addition, when it comes to taking insurance, the dealer’s hand matters, not your hand. Let me put it this way:
People say it is good to take insurance when you have a strong value hand, for example, a total of 20. Because in scenario number 1, the dealer will have a blackjack and you will keep your money. In scenario number 2, the dealer will not have blackjack and the game moves on and you have a strong hand that very likely will win the hand. But people who say this are mistaken. Because it does not matter at all what score you have. Below you see why.
The dealer’s up card is an ace and asks if anyone wants to take insurance. Can you guess how many options are there for the second card? The second card could be an ace, deuce, three, four, and so on until the last card of the suit-King. This simply means there are 13 possibilities for a second card. To keep things simple, I neglect how many cards are already dealt, and suppose all cards are still in play.
Okay, if you bet one coin on each one of these 13 possibilities, how many coins would you spend? Simple: 13 coins. Now, how many coins do you get back after all 13 possibilities are played out? As I have said, insurance pays 2 to 1, so you will get 2 coins for each bet of 1, so the total will be 3.
Now, how many tens are there in the deck? This is a key question because every ten will make you win 3 coins. There is a ten, Jack, Queen, and King-all together 4 tens or face cards. So, there are 4 outcomes out of 13 that a dealer will get a ten as a second card. For each of those 4 outcomes, you will win 3 coins.
Now, let us do the final calculation;
You spent 13 coins to bet on every single possible outcome of the insurance bet. You got 4x3coins or 12 coins in total. HERE YOU ARE! You spent 13 coins to win back 12 coins. Now, if you divide 12 by 13, you will see the exact payback percentage of the blackjack insurance bet.
12/13= 0.923 or simply 92.3%.
This means the house will keep 7.7% as the advantage. Of course, this percentage fluctuates according to the factors I already mentioned. But, the main concept remains the same.
After all these calculations, I hope you understand why insurance is a sucker bet! Because in the long term, blackjack insurance costs you money.
When Should You Take The Insurance?
There is always a reason the house offers you insurance, and it is not for your benefit!
If you are offered insurance a thousand times during your blackjack career and you take it a thousand times, you will end up with less money in your bank account in the long run than you would if you refuse the insurance every time.
You should only take the insurance bet if you are a super professional card counter, and the count is very high, plus 8 or better. If the deck is rich in tens, the odds of a ten being the next card will make it worth it for you to take the insurance.
As a general rule, players should not ever take the insurance bet. But the exception lies with super professional card counters and only when they choose to adjust basic strategy given the running count.
Now, let us go over a couple of more examples to practice the concept enough.
Blackjack Insurance WIN/LOSE Scenarios
The best way to see how an insurance side bet works in blackjack is by trying it yourself. You can try it while playing free blackjack versions offered by online casinos. However, to help you understand the concept better, I provide extra examples for winning and losing an insurance bet.
Winning Scenario:
Let us say you place a bet for $10. Then, you are dealt a 9 and a Jack card. The dealer shows an ace as the first card and offers you an insurance bet. You buy it for an additional $5.
Then, the dealer reveals their second card which is a 10-value card giving them a blackjack.
In this scenario, you win your insurance bet and get paid 2 to 1.
Losing Scenario:
You place the same amount of bet. But now, you are dealt a 10 and an 8 card. Again, the dealer shows an ace, and you buy insurance for an additional $5.
In this scenario, the dealer’s second card is revealed to be a 3. This time, you lose your insurance bet, the house takes your insurance money, and you continue the hand until you see the dealer beats your hand-18 total- or not.
Final Thoughts
In short, avoid insurance bets at any cost unless you have an unlimited bankroll and are a super professional card counter. The basic odds for the dealer having blackjack vary slightly depending on how many decks are in the shoe. But the dealer is likely to have blackjack less than one-third of the time. Of course, you might hit one of these bets every once in a while, but you will lose money in the long run. So, we can conclude that blackjack insurance is the only kind of insurance that not only will not cover your losses but will make you lose money.
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