Insurance is a much debated play in blackjack. To take it or not? And the school of thought seems to be split pretty evenly, with one side believing that if they have blackjack and they take insurance that they are guaranteed even money, odds aside.
What insurance really is, is a side bet on whether the dealer’s hole card is a 10 or not. Basic strategy is designed to not take insurance. So if you want to maintain that house edge being lowered to 0.05% then you need to not take insurance.
This is because insurance increases the houses edge. Which will really mess up that 0.05%.
Here’s how insurance will mess up the lowered house edge that basic strategy can give you:
We’re going to say that in a game of online blackjack that the RNG is polling results by taking into account six decks, which is what you will usually find in a blackjack game in Vegas. With six decks in play there are 312 cards.
Now the dealer has an Ace, so subtract one card from the 312; you now have 311. Now let’s count how many 10 value cards we have. There are four cards per suit, and four suits per deck, which makes sixteen 10 value cards per deck; with six decks, that is ninety-six 10 value cards. And any one of those ninety-six cards could be the hole card. That’s what the casino is hoping you will bet on.
Now comes how all that translates into odds. There is a 96 out of 311 chance that the hole card will be a 10 value card. And translates to 30.868% that the hole card will be worth ten, and 69.132% that it won’t be.
So if you are taking insurance you’re taking it on the 30% chance. Not the smartest move. Why wager on the likely of outcomes?
Now on to how this impact the edge. To figure the edge impact, multiple the payout per dollar by the chance of winning, then subtract the chance of losing: 2×0.30868-0.69132= -7.395. See that negative sign? Negative signs mean that the house is favored.
Taking insurance gives the house an increase of about 7.395%.
By taking insurance, you are throwing the 0.05% that basic strategy gives you out the window.
So if you’re playing according to basic strategy, you will want to decline insurance . Keep in mind that only about 30% of the time will the hole card be a 10 value card, and that taking insurance will increase the house edge by about 7%. Taking insurance doesn’t do you any favors.