Go Back To Learning Main Page

Blackjack and Insurance

If the dealer's upcard is an Ace, the player is offered the option of taking Insurance before the dealer checks his 'hole card'.

The player who wishes to take Insurance can bet an amount up to half his original bet. The Insurance bet is placed separately on a special portion of the table, which usually carries the words "Insurance Pays 2:1". The player who is taking Insurance is betting that the dealer was dealt a natural, i.e. a two-card 21 (a blackjack), and this bet by the player pays off 2:1 if it wins. It is called insurance because it, in effect, can protect the original bet if the dealer has a blackjack. If you bet the full half of the original bet, you win the same amount of the player's Blackjack wager. In this case, if insurance is taken and the player doesn't have blackjack but dealer does, no money is lost. Of course the dealer can end up not having blackjack and the player can still win or lose the blackjack bet, and the insurance bet is forfeit.

Insurance is a bad bet for the non-counting player who has no knowledge of the hole card because it has a house edge of 2% to 15%, depending on number of decks used and visible 10-cards. Essentially, taking insurance amounts to betting that the dealer's hole card is a ten or face card. Since in an infinite deck, 4/13 of the cards are tens or face cards, an unbiased insurance wager would actually pay 9:4, or 2.25:1; since the bet only pays 2:1, the house has a strong advantage. However, if the player has been counting cards, he may know that more than a third of the deck is ten-value cards, in which case insurance becomes a good bet.

If a player has a natural (an ace and a ten or face-card) and the dealer is showing an ace, the dealer usually asks the player "Even money?" instead of offering insurance. If the player accepts the offer, he is immediately paid 1:1 for his natural, regardless of whether the dealer has blackjack. Thus, accepting "even money" has exactly the same payout as buying insurance: if the dealer does not have blackjack, the player would forfeit the insurance bet and win 3:2 on the natural, thus receiving a net payout equal to the original bet; if the dealer does have blackjack, the player would push on the natural and win 2:1 on the insurance wager, again receiving a net payout equal to the original bet. Since taking "even money" is equivalent to buying insurance, it is likewise a bad choice for the player, unless he has been counting cards and knows the deck has an unusually high proportion of ten-value cards.

In casinos where a hole card is dealt, a dealer who is showing a card with a value of Ace or 10 may slide the corner of his or her facedown card over a small mirror or electronic sensor on the tabletop in order to check whether he has a natural. This practice minimizes the risk of inadvertently revealing the hole card, which may give the sharp-eyed player a considerable advantage.

Score	Player buys insurance	Player does not buy insurance
Dealer: blackjack Player: no blackjack	Player loses the original bet, but wins 2:1 on his insurance bet, which was 1:2 of the original bet. Losses and gains even out to 0.	Player loses 1:1.
Dealer: no blackjack Player: wins	Player wins the original bet, but loses the insurance money. The player wins 1:2 of the original bet.	Player wins 1:1.
Dealer: no blackjack Player: same as the dealer	Player loses the insurance money. The player loses 1:2 of the original bet.	Player pushes. No loss or gain: 0.
Dealer: no blackjack Player: loses	Player loses the original bet, and loses the insurance money. The player loses 3:2 of the original bet.	Player loses 1:1.
	Even Money
Dealer: blackjack Player: blackjack	Blackjacks even out, but the player wins 2:1 on the 1:2 of the insurance money. The player wins 1:1 of the original bet.	Player pushes. No loss or gain: 0.
Dealer: no blackjack Player: blackjack	Player wins the original bet at 3:2, but loses the insurance bet of 1:2. The player wins 1:1 of the original bet.	Player wins 3:2 of the original bet.