When does it Payoff to Take Insurance

Blackjack School

When playing blackjack you are given the option to make an insurance bet every time the dealer’s face-up card is an ace. The insurance is taken against the dealer’s hole card being a 10 which will result in the dealer having a natural blackjack and you will lose your bet.

If you take insurance and the dealer turns their hole card to reveal a 10 you would lose your original bet but win the insurance bet which can be up to half the value of your original bet.

The insurance bet pays 2 to 1 which is tempting for many players, however a closer examination of the odds will reveal that the insurance bet is not so worthwhile.

For example: let us assume you are wagering $10 per hand and after the cards are dealt the dealer’s up card is an ace. The dealer asks if anyone wants to buy insurance and you make the maximum insurance bet you are allowed of $5 which is half your original wager.

Play continues and you have a total hand value of 20. The dealer then reveals their hole card and it is a 10 card or a face card (valued as 10) so the dealer has hit a natural blackjack and wins the hand. You will then lose your original bet of $10 and make $10 for the insurance bet ($5 of which was your insurance bet).

So in reality you wagered $15 ($10 original bet and $5 insurance bet) and got back $10, which is better than if you only made a $10 original bet and lost it.

However what would have happened if the dealer did not have a natural blackjack and you had a total hand value of 17 against the dealers hand value of 19 (made up of an ace and 8)?

In this case you would have lost your original $10 bet and the $5 insurance bet so you would have been $15 down. You need to remember that this scenario is more likely as the dealer will hit a natural blackjack less than a third of the times when the dealer’s up-card is an ace.

The Math of the Insurance Bet

Imagine you are playing an 8 deck game. The shoe will consist of 416 cards. Of those 128 cards will be 10-value cards and the remaining 288 cards are aces to nines.

This means that when the shoe is full the odds of the dealer having a 10 in the hole are 288 to 128 or 2.25 to 1. Since the insurance bet pays 2 to 1 the odds it offers are not true odds and they disadvantage the player. In fact the overall casino payouts on insurance bets are 7.7 cents to $1.

When is taking insurance not a “sucker’s bet”?

In order for the insurance bet to be favorable to the player the odds against winning it need to be lower than 2 to 1. The only time the odds drop below 2 to 1 is when the shoe is loaded with 10-value cards. If you are playing in a land casino or play online live-dealer blackjack you are able to count cards and when you count cards you are able to tell when the shoe is loaded with 10-value cards and making the insurance bet is favorable.

Do not attempt to count cards when playing software-based blackjack games at an online casino. You will not be able to count cards as the software does an automatic shuffle after every hand that is played. This means that if you are playing an 8 decks blackjack; every hand played will use the full 8 decks as no cards are ever discarded.

This means that every hand of blackjack you play on software-based blackjack will offer you the exact same odds as previous hands which will make the insurance bet unfavorable. Remember to only attempt to count cards when playing in a land casino or enjoying an online live-dealer blackjack where played cards are discarded which changes the odds as the game progresses until the reshuffle.

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