Posts Tagged ‘insurance’

Blackjack Side Bets: Insurance

Tuesday, January 25th, 2011

Lately I have been writing about a variety of blackjack side bets. Though the side bets come in a number of variations, none have better odds than the regular game. Since the house edge of the side bets is higher, you stand to lose more money playing them. That means that as enticing as those side bets are, it’s best to avoid them.

There is one side bet that people don’t even think of as a side bet, though. That is insurance. The reason most people don’t think of insurance as a side bet is because it’s not something that is played up as one. Side bets usually get cool names that redefine the game, such as Perfect Pairs Blackjack or Lucky Sevens Blackjack. With insurance, on the other hand, everything is normal until the dealer draws an ace as an up card.

When the dealer draws an ace as his up card, he will offer you insurance. This isn’t out of the kindness of the dealer’s heart; it’s to make money. Many players will get worried and think that they must take the insurance, because the dealer is likely to have a blackjack, so it’s best to insure their bet against a certain loss.

The problem is that the dealer having an ace doesn’t mean he has a blackjack. Taking insurance is a side bet on whether the dealer’s hole card is a ten. If you take the insurance bet, you place a bet half the size of your original wager on the fact that the dealer has a ten in the hole. If he does, you receive a 2:1 payout on the insurance bet. Doubling half your bet wins you nothing; you only break even. If the dealer doesn’t have a ten in the hole, you lose that wager and then continue with the hand, giving you a chance to lose twice.

Sound good? I didn’t think so. One reason people think that insurance is a good bet is because they overestimate the odds of the dealer having a ten in the hole. They know that there are more tens in a deck than any other value, so it is most likely to be a ten, right? Wrong.

There are more tens than any other value, but there are more non-tens than tens. In a deck of cards, 4/13 of the cards (or 16/52) have a value of ten. That means that 9/13 (or 36/52) have a non-ten value. That means betting that the dealer has a ten in the hole is a bad bet.

There is one way in which taking insurance can be beneficial and that is if you know that the deck is rich in tens. If you are counting cards, you will know whether a lot of tens have been played or if there are still a lot in the deck. If the deck is rich in tens, taking this bet can be a good idea. Otherwise, I advise staying away from the insurance bet. Like any other side bet, it has worse odds than the regular game of blackjack.

Insurance Against a Blackjack

Monday, December 28th, 2009

When people first learn to play blackjack and are taught the basics, they are usually not taught about insurance. Not all casinos offer insurance. For those that do, when the dealer’s upcard is an ace, they will offer the players insurance. That is because, by showing an ace, they have a good chance of having a blackjack, which would be achieved with an ace and any card with a value of ten. Before the dealer checks his hole card to see if he has a blackjack, he may offer you insurance against the blackjack, which he does out of the kindness of his heart.

Just kidding. He does so to make more money for the house. For this example, I’ll talk about insurance where your original bet is $10. Insurance pays 2 to 1. Since insurance costs half of your original bet, you would pay $5 for insurance in the hopes of not losing all $10. If you and the dealer both have blackjacks, you win $10 (2 to 1 payout) on the insurance and tie on your original bet. Therefore, it is a net gain of $10. If you have a blackjack and the dealer does not, you lose $5 on insurance and win $15 on your original bet, which is a net gain of $10. If the dealer has a blackjack and you don’t, you win $10 on insurance and lose your original $10 bet. The result is a push. If neither you nor the dealer has a blackjack and you win the hand, you lose the $5 insurance bet but win $10 on your original bet, which is a net gain of $5. If neither you nor the dealer has a blackjack and you lose the hand, you lose the $5 insurance and your $10 original bet, which is a net loss of $15. Lastly, if neither you nor the dealer has a blackjack and you tie the hand, you lose $5 on insurance and tie the original bet, for a $5 net loss.

All of this may make insurance sound like a good deal. After all, you have more ways of coming out ahead than losing. Besides, without taking insurance, a dealer blackjack means you either lose or push. Be that as it may, insurance is a sucker’s bet. Since a 10 and all face cards have a value of 10, there is a better chance that the hole card has a value of 10 than any other value. But that is where people get tricked. Yes, the hole card has a better chance of being a 10 than a 7, 5, 2, or 9  for example, but it does not have a better chance of being a 10 than of being anywhere in the range of 1 through 9.

Boiled down to its simplest point, taking insurance is betting half of your original wager that the dealer’s hole card has a value of 10. There are 13 different cards in a deck and 4 of them have a value of 10. That means that there are 9 to 4 odds against that hole card having a value of 10. That ratio doesn’t change no matter how many decks are in play. Therefore, the only time it would be good strategy to take insurance on a blackjack is if you are counting cards and have determined enough 10-value cards are remaining that the odds are in the favor of the dealer having a 10-value hole card.

Unless you’re counting cards and are confident that the hold card has a value of 10, you should decline insurance. The house edge of playing out your hand is lower than on the insurance bet.