While some might consider it a necessary evil of our times, most consider insurance to be a good thing to have when misfortune strikes.
That is of course unless it’s related to blackjack, in which case it’s one of the most highly disputed bets of the gambling world.
If you’re new to blackjack, the guide below will teach you everything you need to know about taking insurance (and why avoiding it will leave you in good hands).
Simply, taking insurance means betting that the dealer will have blackjack.
In blackjack, when the dealer is showing an Ace and before they show their hole card, a side-bet called insurance becomes available.
Typically, a live blackjack dealer will announce the option to those at the table, while online a button or pop-up will appear.
This side-bet is played out independently of the main wager and pays out 2:1. If the dealer ends up getting a 10 and therefore blackjack, the player wins $2 for every $1 put on the insurance bet.
Winning the insurance bet while losing the main hand means the player still wins even money.
If the dealer does not have blackjack, the insurance bet is lost and play continues normally.
Typically, to take insurance you must bet at least half of your original wager on the hand (so you must put $10 on the insurance bet if your original wager was $20).
When the player has blackjack they can also choose to take the insurance bet (called taking even money). When this happens, the hand is immediately over and the player is paid out an amount equal to their wager.
Blackjack Insurance Expected Value
While some players might swear by insurance, math does not.
Insurance bets in all forms have a negative expected value (EV). In other words, when you make them repeatedly, you can expect to lose money in the long run.
For comparison’s sake, let’s look at how the EV of the insurance bet in blackjack compares to other popular gambling bets:
(the second column can be read as how much you expect to win or lose on average for every $1 you wager).
As you’ll see, betting on a random number in roulette is actually a better buy than taking insurance in blackjack.
Similarly, while taking even money is better than the regular insurance bet, not taking even money still gives you better chances of winning over the long-term.
Those negative margins may not look big, but remember they only represent the EV on a $1 bet. When you play for long periods of time and with much larger wagers, those decimal and percentage points add up.
To further drive this point home, look what happens when you are betting $20 a hand and over a period of time you take the even money 100 times and also don’t take even money 100 times.
If you took even money every time, you would make a nice $2000 over those 100 hands. However, if you never took even money on another 100 hands, you would win that same amount if you won just 66 of those 100 hands.
Given that when a dealer shows an ace up there is only about a 31% chance (in a six-deck game) that they will also have a 10, it should be obvious that not taking even money (and especially insurance) is the most profitable strategy in the long run.
One exception to the ‘never take insurance or even money’ rules are for card counters and other advantage players.
If you are good at keeping count of the decks, the insurance bet can easily be taken advantage of when you know there is a surplus of cards valued at ten remaining in the decks.
Without getting into too much about card counting or having to do much actual math, you can roughly calculate whether or not buying insurance is a smart move in a given situation.
For instance, if two player hands are showing and neither of them reveals a ten, then that means 16 of the remaining 47 cards are tens. This calculates to be a larger than 1 in 3 chance for the dealer to have blackjack, meaning insurance is a good bet
Even still, advantage players can’t just rely on insurance since the dealer only shows an Ace once in about every 13 hands and the bet size is limited to half the original wager.
Some blackjack games offer another option called ‘surrender’ (or even feature it in their name). While there are different variations of the rule, it typically means players can surrender their hand and lose just half their original bet while the dealer checks for blackjack.
In blackjack basic strategy, there are only a few instances where it is optimal to surrender (and when that is specifically depends on the amount of decks being played with).
Because having even just a 1-in-4 chance of winning the hand is better than surrendering and losing half, it’s typically only best to surrender on the very worst of hands.
For what it’s worth, insurance is not included in any form of blackjack basic strategy, a testament to how it should be avoided for most casual players.