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Insurance in Blackjack

In Blackjack, there is a game option that is pretty popular with beginning players known as Insurance. However, all the experts will tell you that, in reality, it is to the house’s advantage and should be banished from your game repertoire.

How insurance works

When the dealer’s first card is an Ace, you can take out Insurance against the dealer’s potential blackjack. If you would like to make use of this game option, you can bet up to half of your initial wager. If the dealer succeeds at forming a Blackjack, you will win your insurance bet. If the opposite happens, there are two possibilities: either your hand is superior to the dealer’s and you lose your insurance bet, but win your original bet according to the normal rules of the game; or your hand is inferior to the dealer’s and you lose your insurance bet as well as your initial bet.

Let’s use an example to simplify the explanation. Imagine that you bet 10 euros. The dealer then distributes the cards. The value of your hand is 19. The dealer’s upcard is an Ace. You decide to take Insurance. You bet 5 additional euros.

The dealer looks at his face-down card. It is a ten value card, that is to say, a card whose value is ten – either a King, Queen, Jack, or 10. In this case, you lose your original 10 euro bet. On the other hand, you win your 5 euro insurance bet, which pays 2 to 1. So, you win 10 euros. In the end, you have neither won nor lost money.

However, if the dealer had had a 7, rather than a ten value card, as his face-down card, you would have lost your 5 euro insurance bet, but won your original bet. In this case, you would have made a profit.

Insurance should be banished from your gaming repertoire…

Insurance is not a beneficial game option for players because it has a negative effect on the player’s odds. It should always be avoided, unless you are a card counting expert, in which case, it can sometimes be advantageous to take insurance.

Insurance bets always yield a return of 2 to 1, while the dealer has a 4 out of 9 chance of forming a Blackjack, that is, 1 to 2.25. Even when you are holding a natural Blackjack, that is to say, a hand with only two cards whose value is 21, it is not recommended to take out insurance. In this scenario, the dealer usually says, “Even money?” This means that you accept a return of 1 to 1 rather than 3 to 2. This is equivalent to taking out insurance, losing the insurance bet and winning 3 to 2 on your natural Blackjack. If you do not accept the even money and the dealer does succeed at forming a two card Blackjack, you come out even and you recover your chips.

… unless you are counting cards.

As we already mentioned, a card counter can, in certain cases, profit from insurance. Let’s use an example to simplify the explanation. Imagine that seven players are participating in a game of Blackjack. If none of them possesses a ten value card, it can be advantageous to take out insurance. In this case, the dealer has a strong chance of having a ten value card, which would allow him to form a Blackjack.