Insurance in Blackjack
| Updated: Insurance Bet: Safe Haven or Casino Trick?
Because blackjack has different styles of play, some players prefer to minimize risk as much as possible. In some versions of the game of 21, players may be offered an insurance bet. This option allows them to place an additional wager equal to half the size of their original bet whenever the dealer’s face-up card is an ace. Players seeking a safer approach may find this option appealing because it pays 2:1 if the dealer has blackjack.
Although taking insurance may sound like a safe option, especially if you are new to blackjack, many expert players advise against making this type of side bet. The reason is that insurance increases the house edge, giving the casino an additional advantage over the player. In this article, we explain how the insurance bet works and whether it is a good option when playing blackjack.
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What Is Insurance in Blackjack?
Insurance is an optional move offered by most online and land-based casinos. Taking insurance means placing a side bet that can be made only when the dealer’s up card is an ace. The main purpose of this wager is to give players an opportunity to offset a potential loss if the dealer has blackjack. To use the insurance option, you must place a side bet equal to half your initial wager.
If the dealer has blackjack when the hidden card is revealed, the insurance bet wins and pays at the rate offered by the casino. The payout is usually displayed on the blackjack table. The standard payout for insurance is 2:1, while blackjack typically pays 3:2. If the dealer does not have blackjack, you lose the side bet, and the outcome of your main hand is determined as usual based on its total value and the dealer’s cards.
How to Take Insurance
You can make this move after receiving your first two cards and before the dealer reveals their hole card. If the dealer’s up card is an ace, they will ask whether any participants would like to take insurance. In most casinos, the dealer announces “Insurance open,” marking the period during which you may place the side bet in the designated area on the table.
This option is available for only a limited time, with the dealer announcing “Insurance closed” when the period ends. As mentioned above, you can also take insurance when you play blackjack online. In such cases, all players at the virtual table are asked whether they want to take insurance. You can then accept or decline the option, making the process similar to that at a land-based table.
When to Take Insurance
The insurance bet favors casinos, which is the main reason it is so widely offered. Dealers may prompt patrons to take insurance, but this side bet significantly increases the house edge. If you are new to blackjack, it is generally best to avoid insurance because you are likely to lose additional money over time and deplete your bankroll more quickly.
Blackjack players who follow basic strategy should never take insurance because the side bet has a negative expected value in the long run. Insurance loses more often than it wins, so taking it further shifts the odds in favor of the house. In a single-deck game of blackjack, the house edge increases to 5.88% if you take insurance.
The situation does not improve in multi-deck blackjack games. In variations using between four and eight decks, taking insurance can push the house edge above 7%. Following basic strategy instead can reduce the casino’s edge to under 1%.
Suppose you insure your hand and the dealer has blackjack. You lose your original wager but win the insurance bet. As mentioned above, this side bet requires an additional wager equal to half your original stake. Because a winning insurance bet pays 2:1, it offsets the loss of your original wager, meaning you break even rather than make a profit. If the dealer does not have blackjack, you lose the insurance bet and continue playing your hand. However, there is no guarantee that the round will have a positive outcome.
The insurance bet can be advantageous for card counters because they can estimate the ratio of high-value cards to low-value cards. Tracking the cards gives them a general idea of which cards remain in the deck. If the deck is rich in 10-value cards, taking insurance may be worthwhile because the dealer’s chance of getting blackjack is sufficiently high. Insurance is considered one of the main advantages available to players who know how to apply card-counting systems correctly. Card counters may take insurance when the true count exceeds three.
Taking Even Money on Blackjacks
Some players claim that taking insurance is a good move when they have blackjack. The reasoning is that blackjack is the best possible hand in the game. If the dealer also has blackjack, the result is a tie, or “push,” and nobody wins or loses. Your original wager is returned, but you receive no winnings for your blackjack. By taking the maximum insurance in this situation, you can secure net winnings equal to your original wager, regardless of whether the dealer has blackjack.
Although this may sound reasonable to some blackjack players, the situation is not quite so straightforward. If you have blackjack and the dealer’s up card is an ace, the casino may offer you an even-money payout. New players may find this option confusing because an even-money payout is essentially a disguised insurance bet.
There are some differences between a standard insurance bet and an even-money payout. While insurance is available whenever the dealer’s face-up card is an ace, even money is offered only when the player has blackjack. In addition, players who accept even money receive the payout before the dealer checks for blackjack. Despite these differences, the two options produce the same result when the player has blackjack and takes the maximum insurance.
For example, suppose your original wager is $20 and you have a natural blackjack. The dealer’s up card is an ace, and you decide to take insurance by staking another $10. If the dealer also has blackjack, your main hand pushes, while the insurance bet produces $20 in winnings. Your net profit is therefore $20. If you decline insurance and the dealer has blackjack, the main hand results in a push, so you neither win nor lose money. If the dealer does not have blackjack and you took insurance, you lose the $10 side bet but win $30 for your blackjack. Once again, your net winnings are $20.
This example shows that taking maximum insurance with a blackjack and accepting an even-money payout produce identical returns, locking in net winnings equal to the original wager. Some players believe this protects them from earning nothing if several blackjack hands result in pushes. The counterargument is that accepting even money means giving up the full 3:2 blackjack payout whenever the dealer does not have blackjack.
Why You Should Avoid Taking Insurance
Insurance is a side bet that works in favor of the casino in most cases. Assuming the dealer’s up card is an ace, taking insurance increases the house edge to around 7.39% in a game played with six decks. The dealer will have blackjack about one-third of the time, meaning the insurance bet loses in most situations.
These factors clearly show that if you are not a card counter, you will most likely lose money in the long term by placing this side bet. Since blackjack is a skill-based game, it is important to prepare in advance, follow a sound strategy, and avoid disadvantageous wagers.
Conclusion
In summary, basic-strategy players should not take insurance. This side bet favors the casino and is likely to cost players money in the long run. It is therefore unsurprising that casinos commonly offer insurance at their blackjack tables.
Unless you are an experienced card counter, it is best to avoid insurance. This wager is generally disadvantageous for players who follow basic strategy. If you have studied blackjack basic-strategy charts, you may have noticed that insurance is not included. This is a clear sign that basic strategy recommends avoiding the bet.