Insurance Blackjack Odds

The insurance bet pays off at 2-to-1 odds, which means that you break even on the hand. If the dealer checks and there is not a card underneath that completes a two-card 21, you will LOSE the insurance bet and both sides will play out the rest of the hand as normal. Blackjack Insurance is defined as a bet on the odds of probability. There is a one-third probability the second card of the dealer to be a 10. The player loses the Side Bet in case the dealer does not have a Blackjack, but it has yet another chance to turn a profit as the original bet remains valid. Blackjack Odds and Probabilities. Blackjack, unlike other gambling games is not considered a game of chance, it is one that you can win if you start applying some knowledge. Unlike many other games where the result depends on player luck only, this game provides probabilities depending on.

Blackjack Insurance Strategy Another advanced play that can affect blackjack strategy is taking insurance to protect yourself against the dealer hitting 21. When the dealer is showing an Ace as the up card, you can lay up to half your original wager on whether or not the dealer has a. Blackjack insurance is extremely contradictory as the players are essentially wagering against themselves. In other words, the players are betting that the dealer will have a blackjack hand, which automatically increases the odds of the player landing the losing hand.

Insurance in blackjack should be classified as a sucker bet. It is also classified as a side bet, available in most games of 21. It is offered when the dealer holds an Ace as their up-card. The bet is only open before the dealer checks or draws the hole card. For players not holding a natural blackjack, if insurance is taken, they must place an additional wager equal to half of their original wager. If the dealer goes on to draw a card valued at 10 to make blackjack, the insurance bet is paid out at 2:1.

For players who are holding a natural blackjack, they may also take insurance (called maximum insurance). Here the player forfeits the 3:2 payout for a winning blackjack hand in place for a guaranteed even-money (1:1) payout, regardless of what the dealer has.

The reasoning behind insurance bets is when dealers have a visible Ace card, chances of them drawing a ten-valued card is just less than one in three, so this side bet ‘insures’ against the possibility of such an outcome, to make up for the inevitable loss/push.

Insurance Is A Bad Wager

Picture this: the dealer is showing an Ace. Your hand, in comparison, is terrible. You’ve already had a few hard losses and don’t fancy losing another round. Suddenly, the dealer asks you if you’d like to insure your bet. You already have a good hunch he/she is going to draw a 10 or face-card to make blackjack, so this sounds like a good way out. Or this: the dealer has a face-up Ace but you have a two-card natural blackjack. The 3:2 payout for your blackjack is mighty tempting, but if the dealer also draws a 10 and makes blackjack as well, taking a guaranteed win with maximum insurance, rather than risking a push, sounds like the best move.

Wrong and wrong.

At first glance, insurance bets do seem like good side wagers. They sound like a safe back-up plan in an intense game of blackjack, where a dealer two-card natural seems likely. And the way many blackjack dealers describe the bet makes it seem the best and most logical move you can make in the dreaded situation of a dealer face-up Ace. Unfortunately, this is an illusion and the casino is the only party who will ever make money from such a bet in the long run.

Don’t let yourself be fooled by the way casinos word it or how other players may recommend it, whatever reason they try to offer: place your bets elsewhere. “Insuring weak hands is necessary,” or “it is only half of your original bet;” such rationale is based on the wrong sort of game-play logic. If you are relying too heavily on intuition or superstition to govern your hands, it’s likely you won’t be winning in the long-term.

From one blackjack enthusiast to another, steer clear of insurance bets: it’s almost always a wasteful bet. We are going to explain to you what insurance bets really are, show you the odds behind the bet, and analyse a typical game of 21 to illustrate why it is a sucker’s bet.

How Insurance Bets Work

As a side bet, insurance bets have nothing to do with the cards we have. While an insurance bet is commonly thought of as a wager which ‘protects’ us in the case of a dealer blackjack, in actuality, it is simply a side wager on the dealer having/drawing a natural blackjack, and nothing more. Taking insurance while your own hand is a two-card natural (maximum insurance), or a crappy 15, makes no difference, because it has no bearing on it.

Let us assume we put down a $10 bet, are not dealt blackjack, and the dealer shows an Ace. If we take insurance, half of our original bet ($5) is put on the table to be used as insurance. Now we can’t win both bets, so already we know one of them is going to be a loss. If the dealer’s shows/draws a King as his/her second card, they have blackjack. This means we win $10 (get back a total of $15) from our insurance bet. But we’ve also lost our original wager of $10 because the dealer beats us with blackjack. So we have broken even in the end.

Examining the alternate outcome of the dealer’s hand, let’s say the dealer does not hit blackjack. This means we lose our insurance bet of $5, and play out our initial hand of $10. If we win, we make a $5 profit, is we lose, we lose $15 for the round. but it is essentially a wasteful side-bet in the long-run.

So the possible outcomes when taking insurance, using the above as an example, are as follows:

  • A $5 win.
  • Break even
  • A $15 loss.

The possible outcomes when not taking insurance, using the above as an example, are as follows:

  • A $10 win.
  • A $10 loss.

Looking at the outcomes this way, you’d rather opt for a $10 win or $10 loss when the dealer holds an Ace, as opposed to a maximum win of $5 and a potential loss of $15, not just in the long run, but in the short-term too.

Additionally, in every full 52-deck of cards, four out of every 13 cards are worth 10 points (in blackjack); the cards which would lead to a dealer blackjack after showing an Ace. If you hypothetically wagered $10 as an insurance bet every time the dealer showed an Ace to ‘insure’ yourself against the worst possible outcome (let’s say 13 times), on average, you would win four of the bets (a profit of $80 with a 2:1 payout), and lose the other nine bets (loss of $90). The house gains $10, and you lose more money in the long-run.

This demonstrates the basic explanation as to why, in the long run, insurance is wasteful and you’d be much better served not taking it. The following sections drill further to explain the high house edge of insurance bets.

Insurance Bet Payout, Odds & House Edge

Odds

While no casino bets have payouts which are true reflections of their exact winning odds, as that would eliminate the house edge, it is important to note the differential between the payout and the actual winning odds (which is the number of ways of winning against the number of ways of losing), as this accounts for the house’s advantage.

The payout of a regular insurance bet (when the player is not holding blackjack) is 2:1. A typical 52-card deck on an insurance bet play (only one player v dealer) has 49 unseen cards and three seen cards at the start of the game (dealer’s Ace, and player’s two cards). If we begin with the assumption our hand does not contain a 10-value card, then there are 16 cards worth 10 points in the deck, and 33 other cards.

Let us examine three possible scenarios, with an original initial wager of $20, and an insurance side bet of $10, to determine the true odds of the dealer hitting blackjack by drawing a 10-valued card:

1/ We have no 10-value cards in our hand: there are 16 ten-value cards in the deck, and 33 other cards. So to get the actual odds of winning the insurance bet, we divide 33 by 16, which equates to 2.0625 to 1. So if all was fair in the casino world, we’d actually receive a 2.0625 to 1 payout, or approximately $20.60 from our $10 bet. But as the house needs to profit, this is not possible.

2/ We have one 10-value card and a card that is not worth 10: there are only 15 ten-valued cards remaining, and 34 others. 34/15 works out to be actual winning odds (chances) of around 2.2666/1; so ideally we’d like a 2.2666 to 1 payout, or approximately $22.60 from our $10 bet.

3/ We have two ten value cards in our hand: This means there are only 14 ten-value cards remaining and 35 others. Divide 35 by 14, and we get odds of 2.5 to 1; so ideally, $25 we would like to receive from our $10 bet. This is thus the worst possible hand to take the insurance bet (even though you should not take it at all), because the odds are so out of our favour.

Only with one deck and when the player is holding no 10s, is the house edge for insurance below 3%. It sky-rockets after that.

Insurance May Seem Ideal, But It Isn’t

Many players argue on other sites, books and forums that when the shoe has more ten-valued cards than usual, insurance is a great way to make sure you cover potential loses and quite possibly earn a healthy payout. Yes, ultimately this would make sense if we knew when to take it, but the only way any player can know when such an ideal situation occurs is if you know how to count cards.

Essentially, while many players fall for insurance bets, they aren’t profitable or wise, and have no bearing on our hand. Many players will also take maximum insurance with a two-card natural hand, rather than risk a push, but this is more disadvantageous in the long run, since the Ten in the player’s blackjack means it is less likely the dealer has blackjack.

Insurance is taken far too often. Remain informed about its lack of tactical advantage or logic before playing. And besides, if you take insurance every now and then just because you have a hunch, you are playing on instinct, which is a dangerous method of play in blackjack, as you are abandoning basic blackjack strategy. We can play our hand based on the assumption the dealer has blackjack, but don’t insure, as the odds are very much against us.

Michael Shackleford: Hi guys, this is Mike and the purpose of today's Wizard of Odds Academy lesson will be to explain why you should never take insurance in Blackjack. What insurance is, is a side bet that the dealer has a 10 point card in the hole.

It is offered when the dealer already has an ace up, so it wins in the event that the dealer gets a blackjack. The insurance bet can be made for up to half of the player's original bet and it pays two to one if it wins.

Insurance Blackjack Strategy

I'm going to

…put a two for the pace if the dealer has a 10 point card in the hole and a negative one if the dealer has an ace and a nine which represents that the player lost his insurance bet.

Let's assume six packs of cards, shall we?

Assuming no other information other than the ace up the dealer already has, there are 96 winning cards for the insurance bet, 16 times 6 out of 311 left. There's 311 because a full six-deck shoe is 312 cards and we take one out because of the dealer's ace, and there are 215 cards that will cause the insurance bet to lose.

Let's take the product of the win and the probability.

2 times 96 over 311 is 61.74% and 215 divided by 311 times -1 is -69.13%. In other words, the player can expect to win 61.74% of his bet and lose 69.13% of his bet. We take the sum which is -7.40%. That means that for every dollar the player bets on insurance, he can expect to lose 7.4 cents or 7.4% of whatever his insurance bet is.

7.4% is a pretty high house advantage and consequently, I recommend that you say no to insurance every time. Before someone says in the comments, 'Mike, what if the count is good? What if I'm counting cards?'

Yes. Then, of course, there are exceptions. If you've been counting cards and you know that the remaining cards are very 10 rich, but for the recreational player that's not counting, insurance is a terrible bet and, again, I recommend you decline it every time.

Insurance blackjack odds chart

'What about even money?'

You might be asking me. Well, let me explain to you first of all, that the even money offer is the same thing as taking insurance. It's only offered when the player already has a blackjack and the dealer has an ace up.

Blackjack Odds Sheet

Let's look

…at what would happen both ways if the player has a blackjack and takes insurance. If the dealer ends up getting that blackjack, the main bet will push, so it wins nothing, but the insurance but will win one unit because the player bets half a unit on insurance. The insurance but pays two to one on the winning blackjack. One-half times two equals one.

Next…

If the dealer does not get that blackjack, the player's main wager will pay one and a half but he will lose half a unit on the insurance. The combined when between the main wager and the insurance wager is one unit when the dealer does get a blackjack and one unit when the dealer does not get a blackjack.

It doesn't make any difference whether or not the dealer gets a blackjack. If the player has a blackjack and takes insurance, he wins one unit either way and what the dealer is essentially saying is, 'Look, if you take insurance, you're going to win one to one regardless if I have a blackjack. I may as well just pay you now before I even check what I have.”

It sounds attractive but let's do some math and see if you should take it. Let's evaluate the situation where the player has a blackjack, the dealer has an ace up and the player declines insurance. If the dealer has a 10 in the hole, then the player will win nothing because it will be a blackjack against blackjack tie, in other words, a push. If the dealer has anything else in the hole, the player will win his full three to two on his wager or 1.5.

Let's assume:

knowledge of no other cards in the shoe other than what's already on the table. There are 309 cards left out of the 312 card shoe, less than three cards already involved, the player's ace and 10 and the dealers ace.

The probability that the dealer has a 10 in the hole is 95 divided by 309. Like I just said, there's 309 cards left, the shoe started with 96 tens but the player has one of them. The chances that the dealer has an ace to 9 in the hole is 214 divided by 309.

Let's examine what the player can get back either way:

If the dealer does have that 10 in the hole, the player can expect to get back nothing because the probability of zero times anything is zero. If the dealer does not have a 10 in the hole, the player can expect to get back 1.5 with a probability of 214 divided by 309. The product of those two numbers is 103.88%. If we add them up, it's obvious you still get that same 103.88%.

What this means is

Blackjack Odds Calculator

…if the player has a blackjack, the dealer has an ace up, the player can expect to win 1.0388 times his bet or about 104% of whatever he bet. The decision to whether or not to take even money is the decision; do you want to get back an average of 103.88% of your bet or just 100%?What's more? 100% or 103.88%? Well, 103.88% is more, therefore, if you're seeking the greater expected value, which you should be in any casino game, you should decline even money and go for that 103.88%.

Few caveats here:

Number one - again this is assuming the player is not counting cards, just a recreational player. Number two - this is assuming that a blackjack pays three to two.

Finally, this question has come up on my forum every once in a while and a lot of people use the argument that yes, I make a good mathematical argument for declining an insurance even money but what about the psychological argument?

If you’re in this situation with a blackjack against the dealer ace, some people will say you have a 100% chance of being happy by taking the even money, locking in a sure win but only a 69.26% chance of being happy by declining the even money.

Those figures are right but

…in the casino as well as real life, you should be long-term minded. You should be thinking what is the expected average gain for any decision that you make? Do not always play conservatively and lock in the small win when the average win by taking a chance is greater.

Of course, there are exceptions for life-changing situations but if you’re playing Blackjack, it assumes that you like gambling, to begin with. You’re in the casino you’re gambling, gamble on winning that full one and half, don’t settle on the measly one unit. Furthermore, even if you do use this argument of I want a 100% chance of being happy right now, I’ll take the even money. That happiness is only going to last less than a minute until the next hand.

I think…

…you should be thinking what is going to be your happiness when you finally walk away from the table and you go home for your trip? The more money you win or the less money you lose from that sitting and the whole trip, the happier you’re going to be.

Furthermore, you’re going to get more, shall we say, action by taking that chance on winning with your blackjack. Like I said you’re gambling, to begin with, so gamble!

I can’t think of anything else to say on this topic. I hope that I’ve convinced you to always say no to insurance and even money.

Thanks, guys for listening and I’ll see you in the next video.

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