What Is The Insurance in Blackjack

What Is The Insurance in Blackjack, And Why Is It A Scam?

Let's use some math to see why the insurance in blackjack is always a bad choice.

In the article titled 5 Reasons Why You Suck At Blackjack, I tried to tell you about some of the most common mistakes people make at the blackjack table.

Right after that, one of our readers reached out to me on Facebook with a question about one of the points I have mentioned there. Here's what he wrote me:

“(…)In your latest article about blackjack, you talk about the different systems to avoid and you advise people not to play at tables using a Continuous Shuffling Machine (CSM) as this lowers their winning chances.

Can I ask you why you did not talk about what the blackjack insurance is? As far as I know, the insurance in blackjack is something that players should avoid at all costs. Can you confirm that?

And, if this is true, why is the insurance bad in blackjack? (…)”

Our reader - let's call him 'Frank' - is correct. The insurance should have been included in the list of the most common mistakes in the game because that's exactly what the insurance is: a mistake.

Why is the insurance not a good bet?

One of the easiest ways for a dealer to spot a complete beginner at the table is to see how this one deals with the insurance:

  • If he takes the insurance: he doesn't know how to play blackjack;
  • If he considers taking the insurance: he doesn't know how to play blackjack;
  • If he doesn't consider the insurance: he may know how the game works;

Although any dealer out there will confirm you this rule - this still does not answer the two main questions about it: what the insurance is, and why it is bad.

The insurance in blackjack: what is it? The first point that there's nothing like a real 'insurance' in blackjack - as what we usually refer to as an 'insurance' is actually a side bet.

When you 'take the insurance', you bet on whether or not the dealer has a 10-value card on the hole when holding an Ace.

If on one hand is true that this side bet allows you to save your main one in case the dealers actually finds a 10-value card, you also know what happens when he doesn't: you lose the insurance and you still have the very same chances to lose also your main bet.

Why is the insurance bad? Now that we have seen that the word 'insurance' is nothing but a clever way to make a side bet sound more appealing, let's use maths to understand why this side bet is always a bad choice.

According to the official MENSA guide to casino gambling, for the insurance to be an even bet, one in every three cards must be a 10. Now, in case you are not good with numbers - that's not what happens in blackjack, where there's one 10 every 3.25 cards.

Need an example? I have got some free time today - so, let me tell you about two different situations you can have at the blackjack table.

Situation 1: you don't have a 10. The game starts, the dealer deals the cards, you don't get any 10s and he gets an Ace.

  • Your Hand: 8-6
  • Dealer's Hand: A - X

If you are playing with a 52-card deck, and the three cards that are face up do not show any 10s, it means that there are still sixteen 10s hiding in the 49 unknown cards.

As you can see, this means that you have 16/49 chances to win if you take the insurance, and 33/49 chances to lose. Let's put everything down to a formula where we will call 'E' your 'Expectation' to win, and we will assume that you are going to place an 'insurance bet' of $1.

E = {16/49 * (+2)} + {33/49 * (-1)} = -0,0204

So, in the best-case scenario (where all the 10s are still unknown), the house edge is of 2,04%.

Situation 2: you have two 10s.

A lot of people — for reasons that are well beyond my imagination — seem to think that taking the insurance is good when they are dealt two 10s, and the dealer's first card is an Ace.

  • Your Hand: 10 - 10
  • Dealer's Hand: A - X

This is possibly the wrongest time for taking the insurance, as you already have two of the 10s in the deck, and this decreases the dealer's chances to have one as well.

If you like numbers, here's how this second situation works:

E = {14/49 * (+2)} + {35/49 * (-1)} = -0,01429

Yes - you guessed right: the house edge just went all the way up to 14,29%! So - well, do you still think the insurance is a good bet?

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