Should You Ever Take Insurance In Blackjack

• This strategy is the opposite of the correct strategy. You should never take insurance, even when you have a good hand. Most players don’t take insurance every time the dealer has an ace, but many take it when they have a strong hand. But there’s a good reason, backed by simple math, why you should never take insurance with any hand.
• If your card is an ace, you need to ask the players if they want to purchase insurance. If they do, take each player’s insurance (it should be half of their original bet) and flip over your second card to see whether or not you have a blackjack. If you have a blackjack, collect bets from anyone that didn’t buy insurance.

If you bet $100, your insurance bet must always be $50. If the dealer does have a blackjack, you get paid off at 2:1 for your insurance bet, which means it pays off at $100. You don’t need to have a blackjack to place an insurance bet. You can take insurance with any total versus the dealer’s face-up card.

I’ve written a few articles in the past that included advice that said you should never take insurance when you play blackjack. I stand by this advice because, for over 90% of the players who read my articles, the advice is 100% correct.

But I also need to present the other side of the argument to give you a complete understanding of insurance. The truth is that insurance is the correct play in a few specific situations. Most of these situations only become apparent to professional card counters, and because counting pros spend most of their time beating the casinos and not reading my articles, my advice of never taking insurance is correct for everyone else.

So why am I writing an article about taking insurance?

As you’re getting ready to learn, there are a few situations while playing blackjack when clearly it seems that taking insurance is a good bet. The odds are good that these situations are going to surprise you because they’re not why most players take insurance.

The Argument Against Insurance

The reason why taking insurance is a bad decision most of the time can be explained using simple math. But, as you’re going to see in the next section, this same simple math is used to show in a few situations that insurance is a good bet.

When the dealer has an ace, he or she offers insurance to the payers at the table. Insurance costs half of your original wager and pays 2 to 1 when the dealer has a natural blackjack. The only way the dealer has a natural blackjack is when his or her down card is worth 10 points.

The odds of the face down card being worth 10 points are 9 to 4 against. This is a percentage chance of 30.77% that the dealer has a blackjack. The reason why the odds are 9 to 4 is because of the 13 total card ranks, four of them are worth 10 points, and the other nine aren’t. The four 10-point value ranks are the face cards and the 10s.

When you compare 9 to 4 against the payout of 2 to 1, the casino has an edge. For the bet to be fair, the chances of the dealer having a blackjack need to be the same as the payout. The payout of 2 to 1 means that the percentage chance of the dealer having a blackjack needs to be 33.33%.

In any situation where the chance the dealer has a blackjack is over 33.33%, the insurance wager is a good bet.

The problem is that most of the time, the dealer doesn’t have a 33.33% or higher chance to have a blackjack. This goes back to how you compute the dealer’s percentage, or odds, based on the normal makeup of a deck of cards.

Determining the odds or percentages based on a normal distribution of cards in the deck sounds correct, but it assumes you don’t know the value of any cards. This is the safe way to do it, especially in a shoe game because a single card doesn’t change the odds or percentages much.

But what happens if you take the knowledge of cards played and remaining available in the deck or shoe into account?

Is there a way to use this information to determine when taking insurance is a good bet?

When You Should Take Insurance

Now that you understand how the math behind the insurance bet works, let’s look at a specific example where the bet changes from bad to good.

You’re playing in a single deck blackjack game.

• On the first round of hands, you see the value of 14 cards. Only one of them is worth 10 points, so the remaining cards have 15 cards valued at 10. With 14 cards played, the deck has a total of 38 cards.
• The second round of hands is dealt, and the dealer has an ace face up. You haven’t seen the value of the other player’s cards at this point, and you have a king in your hand. Now you’ve seen the values of 17 cards when you include the two in your hand and the dealer’s ace.
• The remaining unseen cards total 35 and 14 of them are worth 10 points. This means that the odds of the dealer having a 10-point value down card are 21 to 14 or 3 to 2 against. In other words, 40% of the time the dealer is going to have a natural blackjack.

A winning insurance wager pays 2 to 1, so the odds are better than that in this hand. The 2 to 1 payout means that the chance of a dealer blackjack needs to be at least 33.3%, and in this example, the chance is 40%.

While this example is an extreme one to show when insurance is a good bet, you can also learn something from it. Now that you know that the chances of the dealer having a natural blackjack need to be 33.3% or higher, you can use this information in any single deck blackjack game. You can even use it in a double deck game if you do a good job of tracking cards.

This is much like card counting in that you don’t have to memorize every single card that’s been played. All you need to do is keep track of the ratio of total cards played to 10-point value cards. This even works in shoe games, but the truth is if you’re able to keep track of this ratio in shoe games, you should be counting cards.

How Important Is This Knowledge?

While it’s important to recognize and use every small advantage you can find, the truth is that the opportunity to take insurance with an edge is rare. If you play in single and double deck games often, it’s something that you should watch for.

But you should only concern yourself with profitable insurance opportunities after you do a few other things to lower the house edge. The first thing you should do is find blackjack games with good rules. The next thing every blackjack player should do is use basic strategy. It’s a waste of time and energy to worry about insurance before you do these two things.

Once you learn about the rules and learn how to use perfect strategy, then you can start looking for opportunities to take advantage of insurance. But even in this situation, I recommend looking for insurance opportunities as an introduction to learning more about counting cards.

When you start tracking card ratios, which is at the heart of determining when taking insurance is a good bet, you’re starting to use the same techniques card counters use. And the fact is that most popular card counting systems include a breakpoint where players start taking insurance.

If you’re looking for every possible edge at the blackjack table, understanding how insurance works and when you should take it is important. But if you don’t want to do the extra work, then stick with good rules and proper strategy. By declining insurance every time, you’re not going to make a mistake often. When you do, it’s only going to cost you a small amount over time.

It’s a much more costly mistake to take insurance when you shouldn’t than to miss an opportunity to take insurance every once in a while, when it’s the correct play.

Conclusion

Taking insurance at the blackjack table is a bad bet most of the time. If you’re a basic strategy player or a seat of your pants player and don’t count cards, your best play is to always decline blackjack insurance. But as you can see from the numbers included in this article, there are certain situations when insurance goes from a bad bet to a good one.

Should You Ever Take Insurance In Blackjack

Once you master basic blackjack strategy, start looking for opportunities where insurance is a good bet. When you start recognizing these opportunities, it’s a good sign that you’re ready to investigate card counting. It’s a small step from understanding and using what you learned above to become a successful card counter.

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.

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.

'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.

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…

…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.

Should You Ever Take Insurance In Blackjack Winnings

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!

Should You Ever Take Insurance In Blackjack For Real

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.

Do You Take Insurance In Blackjack

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

Should You Ever Take Insurance In Blackjack Without

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