Insurance in Blackjack

The four basic actions that a player can take in Blackjack are hit, stand, double, and split. Some tables also allow “surrender,” i.e. folding a hand and giving up half the initial bet, and most nowadays offer “insurance.” The latter is available only when the dealer has an Ace showing as the up card. In this case, each player in turn, beginning from the dealer’s far left, is given the opportunity to insure the hand against the possibility of the dealer getting a natural blackjack by putting up an additional stake—the “insurance bet.”

Blackjack insurance is much like any kind of any insurance policy, such as life, health, or auto. It is a wager of “negative expectation.” The individual recognizes that something bad may happen and wants to safeguard something valuable against potential loss—in this case, the original bet. The insurance bet will pay 2-to-1 if the dealer peeks at the hole card and discovers a 10 or a face card. Otherwise, the insurance bet loses; it is collected immediately by the dealer and play resumes as usual.

The Basics

If insurance is available, it will be clearly indicated on the surface of the Blackjack table, stating the payout rate according to the House Rules, such as “Insurance Pays 2-to-1.” It is understood that insurance bets can only be made when the dealer has an Ace as the up card. If the dealer shows a 10 or a face card up, even if the hole card turns out to be an Ace and the dealer gets a natural blackjack, no insurance is offered.

The maximum one can stake as an insurance bet is equal to half of the initial wager. This is certainly the most common amount wagered and it covers the full amount bet. Should the dealer get a blackjack, the original wager and the insurance bet are both returned to the player, just like a “push.”

However, at many tables it is also possible to insure a hand “for less.” This is done by wagering at least the table minimum and no more that the amount initially bet. The player must also be sure to say clearly saying to the dealer, “Insuring for less.” This action may occur when a player is short on chips and cannot afford full coverage or when the hand is so poor that the player intends to surrender (if available) and is looking to recover just a portion of the bet in any event.

A special case is when the player is holding a natural blackjack of her/his own. Under such circumstances, the dealer will not offer insurance but will instead ask the player, “Even money?” This is offered because a player with a blackjack would receive a payout of 1-to-1 as the net result if a full insurance bet were made, regardless of whether the dealer gets a blackjack or not.

If the player accepts the offer of even money, the hands wins 1-to-1 instead of 3-to-2, no matter what hole card the dealer reveals. If the player refuses even money, one of two things will happen. When the dealer has a blackjack, the player’s natural will be a push and no money will be won. When the dealer has anything other than a blackjack, the player’s natural will pay the customary 3-to-2.

Only after all players have had the opportunity to accept or decline insurance will the dealer check the hole card. If it turns out to be a 10 or a face card, uninsured hands will lose, while insured hands will have their stakes returned.

Insurance Strategy

Many players believe that insurance is a “sucker bet.” After all, it is a wager that something bad will happen, when the exact opposite might be true. It is like betting against one’s self. With the exception of taking even money, when the player insures correctly, nothing is gained or lost. When insurance is the wrong bet, an amount equal to half the initial wager is lost. It seems as if there can be no way to win with insurance bets.

For this reason, one very prevalent basic strategy is to never take insurance. Players can simply treat it as if it did not exist. This approach will have no negative effect on the odds of the game. On the other hand, it offers no advantage, either.

A better strategy is to ignore insurance, other than to take even money whenever it is offered. All that is lost is an “opportunity cost”—the bonus 50% that might be won for a natural blackjack. There is no risk of losing any part of the original wager.

There are also circumstances when insuring a “good hand,” such as an eleven or a twenty, is the percentage play. If the dealer catches a blackjack, nothing is lost or gained. Otherwise, the player will have the advantage, doubling down on eleven and virtually assured of a push or a win on a twenty. The downside, of course, is that the insurance bet will have been lost, so the net gain will be less than it would have been if not insurance were ever taken.

Statistics show that the correct time to make an insurance bet is only when the odds against winning are less than 2-to-1. In fact, conditions for the player having an edge on insurance are relatively uncommon. Without counting cards or sing a computer, calculating such odds is a challenge beyond the skills of most players, so they go back to the easiest of tactics: Never take insurance.