Why Basic Strategy Makes Insurance Not Necessary

On 02.03.10, In Blackjack Strategy, Online Blackjack, By Vivi

Basic Strategy was created and then tested to give players the best play possible for the hand that they are dealt against the dealer’s up card. And while this does not mean that you will win every time you play according to basic strategy, you will tend to win more in blackjack.

This is because basic strategy has taken into consideration the cards that dealers are more likely to bust on and which ones they are less likely to. This explains why you stand on stiff hands when faced with anything below a dealer’s 6. Those cards, 2 through 6, are the ones the dealer is more likely to bust on. This does not mean that they will but the chances are higher with a 6 than with a 10.

By playing blackjack according to basic strategy you can lower the house edge to about 0.05%. This happens over time. And some blackjack players feel that once they are winning more that they need to protect their strong hands against a dealer’s Ace.

Not only is the Ace the least likely card a dealer will bust on, it is necessary for having a natural blackjack. A dealer will offer you insurance.

As a basic strategy player you should decline.

Insurance is essentially a side beat that casinos have in blackjack that can help to not only increase their profit, but to also raise their edge. This is because the chance of winning versus the chance of losing creates, on average, an edge increase of 7%. And it is in the house’s favor.

Taking insurance has the potential to undo the work you have done to lower the house’s edge in blackjack to 0.05%. That impact has the potential to lower the house edge to below what the average blackjack game’s house edge is to begin with.

Most blackjack games will have an average of 2-5%. If you play basic strategy and lower the house edge to 0.05%, taking insurance will bounce the edge back to the house around 6.5%, which is likely to be worse than where you started.

When you are playing basic strategy never take insurance. If you watch you will see that serious players will not take it. And if they are not then neither should you.

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Making Insurance Profitable Rather Than a Loss

On 12.04.09, In Blackjack Strategy, Online Blackjack, Uncategorized, By Vivi

In my last post I covered what insurance really is. Also discussed was why taking insurance will cost you more money in the long run. However, there is one instance in which it is actually profitable to take insurance.

If you are a card counting player then you are able to distinguish the one instance in which it is good to take insurance.

In order to be in that one instance two circumstances must be in place first:

You must be playing with a remaining deck that is rich in ten value cards. You must also have been dealt a natural blackjack.

Now, let’s examine the two profitable results that can happen once you find yourself in that instance of a high card rich deck and are holding a natural.

For this example, we will say that you are playing at a $10 table. You have been dealt a natural blackjack and the dealer’s up card is an Ace. You have been counting the deck as the game has been played. You know that the deck is rich in ten value cards. Because of the dealer’s Ace you are offered insurance. Because this is that one instance when it is favorable to take insurance, you take it.

The first result is that the dealer’s hole card is a ten value card—he has a natural blackjack too. You will collect on your insurance bet—this is because insurance is really a side bet on whether or not the dealer’s hole card is a ten value, and since it is you win the side bet with a 2-1 payout: $10. As for you both having naturals, that is a push and your original bet is returned to you. But you still made a net gain of $10 all because you took insurance. If you had not taken it, while you would not have lost any money, you would not have gained any either.

The other result is that the dealer does not have a natural, so you lose the insurance bet. But since you have a natural blackjack you won the 3-2 payout. You win $15 minus the $5 insurance bet. Your net gain is still $10.

This is how insurance can in fact be profitable for you.

But you must be dealt a natural blackjack. And you must have been card counting and know that the deck is rich in ten value cards.

If you do not have both of those then do not take insurance.

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What is Insurance?

On 11.24.09, In Blackjack Strategy, Online Blackjack, Uncategorized, By Vivi

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.

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