As you play blackjack, there will come a time when you are offered insurance. This seems like a nice thing for a casino, online or land based to do, offering to insure your bet. But taking insurance can actually cost you more in the long run. It is one of those little things a casino does to try to take a bit more of your money.
There are two parts to understanding insurance: knowing what it really is and how it really works, and when it is profitable to take insurance—there is only one instance that it is.
First what insurance is.
You are offered insurance when the dealer’s up card is an Ace. Insurance is offered because an Ace is necessary to having a natural blackjack. On the surface, the casino would like you to believe that taking insurance will protect you from losing your bet if the dealer has a natural blackjack.
What insurance really is, is a side bet that the dealer’s hole card is a ten-value card, the other card required for a natural blackjack. With insurance there are three chances of winning, one pushing and two losing chances. Again, on the surface it sounds pretty good, but it is not.
And here’s why. We are going to look at insurance from a statistics point of view, considering an infinite shoe—and since most casinos use six to eight decks and online casinos use Random Number Generators, the numbers and probability are very close. There are 9-4 odds against the whole card being a ten value card.
Translating this to money, we will say that you make 1300 $5 insurance bets. You would win your insurance bet 400 times, making $4,000. But you will also lose 900 times, losing $4,500. That means you will lose $500 for taking insurance.
In my next post I will explain the one circumstance under which it is advisable to take insurance.
Look for Making Insurance Profitable Rather Than a Loss.