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Insurance in Blackjack

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What is Blackjack Insurance and should you take it?

All blackjack tables either live or online have a semicircular area saying "Insurance pays 2:1".

Insurance is a separate bet that you can make to protect your original bet when the dealer's face up card is an ace. Insurance must be taken or declined before any other action is made by the player.

The risk to lose a hand when the dealer has an ace is considered high, because the dealer has a large chance to have blackjack. As there are 16 cards worth ten out of 52 cards in one deck, this is on average almost a 31% chance for the dealer to have blackjack. This is why many blackjack players like this insurance option as they feel they are in a bad spot and are more than happy to get hedged.

When you take insurance, you will make a side bet half the size of your original bet. If the dealer effectively has blackjack, you will win this side bet and get twice the amount you wagered, which covers exactly the loss of your main bet. So you will come out even on this specific hand.

On the other hand if the dealer does not have blackjack, the insurance bet is lost and you will continue to play the hand normally for the main bet.

Should you take blackjack insurance?

In short the answer is "no". Do not take the insurance option, as this gives a massive edge to the casino and this is how they generate profits from unsuspicious gamblers.

The point is that blackjack is a game of statistics, and taking insurance has a negative expected value. In other words you will not make money from it on average. On the contrary this will cost you over the long run.

This is far from obvious to know exactly how it works, as it requires making complicated analysis of all the cases. But here is a simple explanation of why it is not worth it.

As insurance pay 2:1, you would need the dealer to have blackjack 33% of the time to break even on the insurance bet. Using for illustration an insurance bet of $10, you would lose it 2/3 of the time in this scenario. And 1/3 of the time you would make $20. So 2/3*(-$10) + 1/3*(+$20) = 0, which shows that this is even money on average.

If the dealer had blackjack more often than 33% of the time, it would be profitable to take insurance. Conversely if he had blackjack less then 33% of the time, it would be a loss on average.

But remember we said at the beginning that the dealer had slightly less than 31% chance on average to have blackjack. Continuing with the same example, the expected value of the insurance bet is 69%*(-$10) + 31%*(+$20) = -$0.70.

A small amount but compounded over many hands, this will be significant. So this is a bad idea to take insurance.

The only time you should take insurance is when you know there are many tens left in the deck, because in such case there is a higher than normal chance that the dealer has blackjack.


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Good Luck at the blackjack tables.