Blackjack Insurance: Is it a Sucker Bet?

Question from a Player: My problem is that I have this feeling that I’m taking insurance far too often. I lose this bet a lot, even though I only take insurance when my true count is +3 or more. (I’m playing mostly in six-deck games in Mississippi and Louisiana.)
On my last trip, I put in 19 hours at the tables over a three day period. I kept track of all my insurance bets. I took insurance 14 times, won 5 times and lost 9 times. I realize this is a very short test from the statistical point of view (I’ve been reading your column for years!), but my experience on all of my trips is similar to this. I lose the insurance bet way more than I win it. This is just the one trip where I kept track of my results.
What’s worse, when I win the bet, I don’t really win anything, I just break even on my hand. Winning is actually more like pushing. When I lose the insurance bet, however, I not only lose the insurance, but I still have to play the hand against a dealer ace, which also often loses. I’m starting to think this insurance bet is just a sucker bet for card counters.

Blackjack Insurance: A Side Bet, Nothing More

Insurance is a side-bet that dealers offer to players whenever they have an ace showing. The idea behind insurance is to protect your bet just in case the dealer has a blackjack. How Does Insurance in Blackjack Work? When a dealer has an ace showing they’ll ask you if you want insurance. 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. In the online blackjack game, you will see the “insurance” icon, giving you an opportunity to exercise a side bet, allowing you to ensure your hand against instantly losing to the dealer’s two-card 21. You will then have to decide whether you’re going to do this or not.

Answer: Many players are confused about the way insurance works because, in casino jargon, you are “insuring your hand.” Insurance is a side bet, and has nothing to do with the results of your blackjack hand.You are simply betting that the dealer has a ten in the hole. If he does, you win 2-to-1. It is not a “push” for your hand.
For example, you have a $100 bet on the table. You have a 16 vs. a dealer ace. Let’s say the insurance bet does not exist. The dealer peeks at his hole card, flips over a ten, and you lose your $100.
Now, assume insurance is offered. You have a true count of +5, so you put out $50 for insurance. Now, when the dealer flips over his ten, he pays your $50 insurance bet at 2-to-1 ($100), but you still lose your hand, so you break even.
Since, without the insurance bet, you would have been minus $100, this $50 bet gained you $100.
The actual result on your blackjack hand will be exactly the same regardless of whether or not you take insurance. If, for example, the dealer has a blackjack, you lose; if not, then you have to play out your hand vs. whatever he does have.
Also, your analysis of your blackjack insurance results indicates that you did pretty close to what you would expect as a card counter. For the sake of simplicity, let’s say all of your insurance bets were $50 each. Since you lost 9 times, this is a $450 loss; since you won 5 times (at 2-to-1), this is a $500 win. So, you’re $50 ahead of where you would have been had you never taken insurance.

Technically, your fourteen $50 insurance bets would total $700 in action. A $50 win total on $700 action would mean that insurance has paid you at the rate of 6.67% — which is more likely a positive fluctuation in your favor than a negative one.
Remember, if you win your insurance bet just half as often as you lose it, you break even. So, it will always seem like you lose this bet more than you win it, even when you are making money on it. ♠

For more card counting and blackjack analysis, see the Professional Gambling Library.
Return to Blackjack Forum Home

Anyone who’s read a reasonably good post about basic strategy in blackjack knows that you should never take insurance. It’s a sucker bet.

But sometimes casino dealers will confuse players by offering them “even money.” That’s just another way of offering insurance to the player.

The selling point of even money in blackjack is that you’re going to win no matter what. This post explains the fallacy behind thinking that insurance (or even money) is a good idea when playing blackjack.

How Even Money Works in Blackjack

Even money works when you’ve been dealt a natural, a two-card hand that totals 21. Such a hand is also called a blackjack, and it pays off at 3:2 in most games.

There’s one catch to having a natural. If the dealer also has a blackjack, it’s a push. When the dealer has an ace showing as the face-up card, you get the opportunity to place an insurance bet. They’ll often refer to this as taking “even money.”

What Does Taking Insurance Mean In Blackjack

If you have $100 in action and agree to take even money, the dealer will pay you $100 and take your cards before looking at her hand to see if she has a blackjack, too.

This seems like a good idea. After all, if you turn down the even money, and the dealer flips over a blackjack, you lose your $100.

On the other hand, if you decline even money, you win $150 on your $100 bet. Which is the better deal?

It’s about how much you win or lose in the long run.

To really understand whether even money makes sense, you need to look at how often the dealer will win or lose and how much you’ll win on average every time.

Decisions and Consequences in This Blackjack Situation

Let’s simplify this for a minute. You have two choices. You can take even money and win $100. Or you can decline even money, winning either $150 or facing a push.

It should be obvious why declining even money makes sense, because when you push, you don’t lose any money. You just get your original bet returned to you.

How often will the dealer have a blackjack?

This varies based slightly on how many decks are in use, but for the sake of simplicity, let’s assume that the dealer will have a blackjack only 30% of the time (this is really close to the actual number). 70% of the time, you’ll win 3:2 on your bet.

Let’s play this situation out 100 times in a row.

• Player A takes even money, which means he wins $100 on all 100 hands, or $10,000.
• Player B declines even money, which means he wins $150 on 70 hands, or $10,500.

Obviously, declining even money results in more wins in the long run.

What’s the Difference Between Even Money and Insurance?

Insurance is a side bet that the dealer has a 10 as the hole card. You can only place this bet when the dealer has an ace showing face-up, and the wager for this must always be half of the original wager size. If you bet $100, your insurance bet must always be $50.

If the dealer does have a blackjack, you get paid off at 2:1 for your insurance bet, which means it pays off at $100.

You don’t need to have a blackjack to place an insurance bet. You can take insurance with any total versus the dealer’s face-up card. If you have any total other than 21, you lose your original bet against the dealer.

But since insurance pays off at 2:1, you’ll wind up breaking even on that action.

So basically, even money is just an insurance bet that you can only make when you have a blackjack. When you take even money, though, you lose your opportunity to get the 3:2 payoff.

Uninsured Motorist Stacked Vs Unstacked

You don’t have to put up the additional bet, because the casino has just subtracted that $50 from your payoff for your hand.

Insurance is available any time the dealer has an ace showing, but even money is only available when the dealer has an ace showing and you have a blackjack.

There’s An Exception to Every Rule

Not every blackjack game in every casino offers 3:2 payouts for a blackjack. In some games in some casinos, the payout for a blackjack is only 6:5.

What Does Insurance Mean In Blackjack

You should NEVER play in such a game, because it gives the house an edge almost 1.4% higher than it would have if it paid the standard amount.

What Does Buying Insurance In Blackjack Mean

But if you ignore that advice and choose to play in such a game, the even money bet suddenly makes sense.

Here’s why. You still have the 30% probability that the casino will have a blackjack. So, now, you’re looking at winning $120 approximately 70 times out of 100, or $8400.

But if you take even money, you’ll win $100 every time for $10,000 in winnings. In a 6:5 blackjack game, even money is a GREAT bet.

The problem is that it doesn’t come up often enough to make up for what it does to the house edge. A good blackjack game might have a house edge of around 0.4% if you play with perfect basic strategy.

In Blackjack What Does Insurance Mean

Convert that to 1.8%, which is what the 6:5 payout does and, suddenly, that great game becomes pretty mediocre. And that 1.8% accounts for the even money proposition, too.

Conclusion

The basic blackjack strategy should inform your every decision in blackjack, but the correct basic strategy varies based on the rules in place.

The differences between insurance and even money and when it’s appropriate to place such a bet are great examples of this.

Blackjack Insurance Rule

Do you ever take even money when it’s available at the casino? If so, do you think this post might have changed your mind about that?

Let me know what you think in the comments.