Insurance is a common debate in blackjack regardless of whether you play online blackjack or blackjack in a brick and mortar casino. There are some that say insurance is a sure thing and to take it when offered. Then there are those who say insurance is the devil, that it will hurt your odds and to avoid taking it. Then there are so who are uncertain because they are not really sure what insurance truly is.
So we will start there. Insurance is offered when the dealer is showing an Ace, one of the cards that is key to having a natural blackjack and beating all other hands. Players can take insurance for half the cost of their original wager. If the dealer’s hole card creates a blackjack for the dealer, the player receives a 2-1 payout on their insurance wager, which is equal to their original wager which they just lost to that natural blackjack.
Insurance is really a side wager on whether or not the dealer’s hole card is a 10. If it is you lose your original wager but are paid insurance for a total negative net. Because the player is putting himself in a position to lose more money, it increases the house’s edge and lowers the players blackjack odds.
But really the odds on the dealer having a 10 are small. There are thirteen cards that the hole card could be. Of those thirteen, only four are worth 10. So there is only a 30% chance that the hole card is worth 10. The other 70% of the odds are on it not being worth 10.
Knowing that that odds are against the hole card being worth 10 and knowing that insurance decreases your blackjack odds because of the opportunity to lose money faster should be enough to keep you away from insurance.