Blackjack Insurance Explained


Preface: Blackjack insurance is an optional bet – a side bet – offered to players when the dealer’s up card is an Ace. Blackjack insurance is a hedge against the dealer having blackjack. The blackjack insurance bet costs 50% of your original bet, and blackjack experts roundly agree that the insurance bet is not worth the investment.


As a casual player, you may be wondering whether you should ever take the blackjack insurance option, and if so what can you expect when you include this bet as part of your blackjack game? This comprehensive blackjack insurance guide details the relevant components of blackjack insurance from a player’s perspective.


Detailed Explanation of Blackjack Insurance


Many people invariably gravitate towards insurance for a variety of reasons. It is often called a grudge purchase, or even a necessary evil. Much the same is true in games of blackjack. All blackjack games require the placement of a real money bet. The buy-in effectively allows players to compete against the dealer for real money payouts. However, blackjack is a game based on imperfect information.


There is a definite skill-based element where players can implement tactics and strategies, bankroll management, and sound decision-making to great effect. The other component of blackjack is luck, and that’s something players have zero control over. Both of these elements contribute towards your success as a blackjack player. One cannot be discounted at the expense of the other, and despite methodical planning, lady luck can upend even the most watertight of strategies.


It is against this backdrop that blackjack insurance comes into play. Right off the bat, it should be known that blackjack insurance is not mandatory. It is an optional bet – a side bet – made available to players when the dealer’s up card (visible card) is an Ace. Why an Ace? An Ace counts as either 1 or 11 in blackjack.


This is significant insofar as it can pair up with any 10-value card to immediately crown the dealer a winner. Recall that blackjack is not merely 21; blackjack is any 2-card hand that equals 21. It must contain an Ace and a 10-value card. Hence, the Ace is significant and that’s why players are offered the blackjack insurance bet when it is visible.


The blackjack insurance bet comes at a premium. It costs players 50% of the original bet that was placed on the table. For example, if a player bought into a game of blackjack for $100, the insurance bet will cost $50 ($100 x 50% = $50). If the original bet was $200, then the blackjack insurance bet will cost players $100 ($200 x 50% = $100). Overall, blackjack insurance bets increase the size of the player’s outlay per hand that is dealt. The casino benefits from these bets in many ways, not the player.


Blackjack Insurance Bets Winning Probabilities


The probability of the dealer drawing a 10-value card is 4/13, or 30.8%. This figure is calculated by determining the total number of 10-value cards in each suit. Since every suit includes: Ace, 2, 3, 4, 5, 6, 7, 8, 9, 10, Jack, Queen, King, it is clear that the 10-value cards are 10, Jack, Queen, King. There are 4 suits in every deck of 52 cards, but the percentage (the ratio) doesn’t change regardless of the number of decks that are used. 4/13 = 30.8%. That means the dealer has blackjack 30.8% of the time. This is where the numbers are stacked against the dealer having blackjack: the dealer will not draw a 10-value card 69.2% of the time. If we round these figures off, 69 out of every 100 instances of the dealer having an Ace will not result in blackjack.


If you bet $100 x 100 times in blackjack and took insurance every single time, the following results would likely take place: The total cost of your original blackjack bet would be $10,000, and the total cost of your side bets would be $10,000 x 50% = $5000. Your total outlay would be $15,000. Now if we assume that the dealer will have blackjack 31% of the time, you will win the blackjack side bet 31% of the time. This bet pays 2 to 1. That means that you will get $5000 (0.31) 2 = $3100 back and lose $1900 over your 100 hands. That’s just on the blackjack side bet. If the dealer has blackjack, you will also lose your original bet of $100 every time this is the case. $10,000 x 31% = $3100 – that’s exactly the same amount you win back with the insurance bet. That’s why it’s called a hedge.


So, it is clear that the blackjack side bet is designed to help players recuperate losses that would result in the absence of the blackjack side bet. As you can tell, the odds are stacked against the dealer having blackjack, making this the ideal sucker bet. That doesn’t mean that you should never buy insurance as a blackjack player. There are instances where advantage players and skilled blackjack card counters can benefit from the insurance bet. If you have a keen grasp of card counting (only a limited number of blackjack players fall into this category), and there are excess 10-value cards in the decks, you will be in a much stronger position to win back your money and save your original bet if you place the blackjack insurance bet in these cases.


An example will help to clarify this:


If you’re playing multi-hand blackjack with 3 hands in front of you and none of the cards in your hands are 10-value cards, it is safe to assume that there is a much greater likelihood of a 10-value card being in the deck. By contrast, if all 3 hands in front of you include 10-value cards, there is a much lower likelihood of a 10-value card being in the deck for the dealer. How many 10-value cards are in a deck if 3 x 10-value cards are in front of you on the table? There are 16 x 10-value cards in every deck – less 3 x 10 value cards on the table = 13/52 or a 25% chance of the next card being a 10-value card. That’s much lower than the 31% likelihood of a 10-value card in the absence of 10-value cards on the table in front of you.


In certain cases, blackjack players have the option to surrender their hands and lose 50% of the bet. This is not attractive to anyone, since it’s a guaranteed loss. However, blackjack insurance ranges between 1:4 and 1:3 chances of success, so you may want to try that option from time to time!

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