Blackjack Strategy: Can Insurance Help Me?

Recently I was asked a question in regards to blackjack strategy and insurance. The young man in question plays blackjack online, and had heard that insurance can sometimes be advantageous for the player. He wanted to know if this were true or not.

In a way, yes, it is true. But! But it cannot be used for online blackjack.

In order to make insurance work for you in terms of blackjack strategy you need to be a card counter. And I do not just mean that you have just started counting cards in the casino. You need to be a strong card counter.

Real quick let’s take a moment to review what insurance really is. Insurance is offered when the dealer has an Ace showing. The player can then make a second wager for half the amount of his original wager so that if the hole card is a 10 he will receive a payout that is equivalent to his original wager, but he will lose his original wager.

It sounds like this in not a bad idea, but players who take insurance will lose more money in the long run simply because they are wagering more money when they take insurance. Because insurance is really a side bet on whether the dealer’s hole card is worth 10 or not.

So if the player stands to lose more money in the long run, how can there ever be a time when taking insurance is advantageous to the player?

There are only two occasions when taking insurance could be advantageous: when you are holding a 20 or a natural blackjack AND you have been counting the cards and know that the deck is rich in high cards.

True the dealer could wind up with blackjack, but the net gain is the same. Take a look.

You are making $10 wagers. You have a natural blackjack and take insurance. If the dealer does have a natural blackjack too, then you push and hang on to your $10, but you also collect on the $5 insurance wager, picking up $10.

If the dealer does not have a natural blackjack, you lose the $5 insurance wager, but win $15 from having a natural blackjack. Subtract the lost $5 from the $15 you won, and your net gain is still the same: $10.

But taking insurance under these conditions can only happen when the deck is rich in high cards, and the only way to tell that is to be skilled at card counting. And because this little blackjack strategy trick requires card counting it means that it cannot be used for online blackjack since card counting cannot be down in online blackjack.

But this insurance trick is still a fun additive to your blackjack strategy—a bit of a sneaky way to take a play meant to take a player’s money and turn it around.

Insurance Used More and More in Blackjack

It seems that insurance is being used more and more often in blackjack. No matter how often a blackjack player hears that insurance is bad, they will use it anyway. But the kicker is that they don’t seem to really want to take insurance! Just look at their faces—they’re regretting taking insurance as they are putting the chips down.

And I actually have a theory on why this is happening.

I’m going to blame the casinos leaning on the bad economy. No, wait, let me explain.

Those who enjoy casino games—yes, there are people who play blackjack because they like the game, not for a need to gamble—are finding that they have less money to play with of late.

The economy has hit most of us harder than we would like. We don’t have as much extra money to play with. So even though we love the game and have made peace putting some money on the line for fun, we tend to be more cautious about how we play and how much we wager.

Casinos are starting to bank on this extra caution through insurance.

Insurance implies the creation of a safety net for your wager. And this is exactly what casinos want you to think. They want you to think that by spending more money you are saving your money.

Yes, you read that right—the casinos are hoping that with players being more cautious that they can bank on that caution by urging insurance.

But when you take insurance you are in fact putting more money on the line.

But you’re spending more when you take insurance. On a $50 wager insurance is $25. If the dealer doesn’t have blackjack but still wins the round, you’ve lost $75 instead of only $50. That’s how they get you.

Remember, insurance is a side bet on whether the dealer has a 10 in the hole or not. Keeping that in mind it will help you to avoid taking insurance.

Casinos want blackjack to be afraid that they’ll lose their money when the dealer is showing an Ace. With money being dearer of late, casinos like to see blackjack players taking insurance, encouraging players with the idea that their money is at risk and money is harder to come by, so make sure that you’re protecting your wager against that Ace. That’s exactly what they want you to think.

But all gambling—blackjack included—is a risk. As a blackjack player you know you have money on the line and you’re doing so willingly. It doesn’t make sense to be afraid of what the dealer has and take insurance all in the name of saving money. Be fearless and go head to head with that Ace without insurance!

Basic Strategy and Insurance

The majority of blackjack players play the smart way. Meaning that they play according to basic strategy. They start out with the chart and in time, either through playing many, many times or from studying it, are able to play without the chard on hard because they know what plays to make and when.

Playing blackjack—both online and off—according to basic strategy is one of the best tools in a blackjack player’s strategy arsenal. While, yes, it’s true that playing perfect basic strategy can lower the house edge to 0.5%, there is more that basic strategy gives a blackjack player.

Basic strategy will tell a blackjack player how to play any hand he could be dealt against any up card the dealer has. So a basic strategy player will always know what play to make—there is no doubt in their plays.

And what to you get when you know what you’re doing and you know that you know what you’re doing?

Confidence. You have confidence.

Having confidence in your blackjack playing is important. There will be times when you are offered insurance. And we all know what insurance really is and why we never, ever take it. But there are times when you have a strong hand and don’t want to waste it. But you know, as a basic strategy player, that you shouldn’t take insurance.

The other thing that a blackjack basic strategy player must remember is that insurance will undermine the work of basic strategy. While basic strategy lowers the house edge in blackjack, insurance will raise it. This is why it’s very important for a blackjack player to have the confidence to refuse insurance, even when they have a strong hand.

What Do We Not Play in Blackjack? Insurance!

I’ve said it before and I’ll say it again. Insurance is a bad bet. It’s a side bet and all side bets should be avoided. Side bets are used by casinos—online and off—the rake in extra money. And that is why I always tell blackjack players to stay away from blackjack variations that are based on side bets.

So how exactly is insurance a side bet?

Well, blackjack players, when is it offered? It’s offered when the dealer has an Ace showing. And since an Ace is required to make a natural blackjack, and it is less likely to be dealt an Ace than a 10 card, the dealer will offer up insurance as a way to protect your bet in case he does have blackjack.

But insurance is a drain on your bankroll. Look at the numbers:

Let’s say you are playing at a $50 table. You place a bet with the minimum $100. The cards are dealt and the dealer is showing an Ace; he, of course, offers insurance.

Just to see what happens we’re going to say that you take insurance and put out the $50 to insure your bet. It turns out the dealer doesn’t have blackjack, but a 9 for his hole card. That’s a soft 20 and the dealer has to stand on it, which means that unless you have a 20 too you just lost the round. And since you lost the round you’ve lost your wager and your insurance bet.

You just lost $150 instead of only $100.

How’d you lose so much more? Simple. You took insurance. And insurance only pays if the dealer’s hole card is worth 10. And in this instance the dealer didn’t have a card worth 10 as his hole card.

There’s a misconception in novice blackjack players in which they believe that if they take insurance and lose the hand that they will still collect on their insurance bet. And that’s why it’s important to understand that insurance is not really insurance but a side bet on what the dealer’s hole card is.

But you can see how taking insurance can cost you extra, which is exactly what the casinos want from you—more money.

Blackjack Philosophy No-No’s—Part VII

Raise your hand if you like losing money?

No hands? I didn’t think so.

We’re going to take a look at a bad play that is also another player contrived blackjack philosophy. It’s also a no-no.

In your time playing blackjack you are bound to come across other players who are set on insuring a 20. There are only two hands that you can have to have 20 and be in the position to take insurance: an Ace-9 and 10-10.

Both of those are two of the strongest hands that you can have. The only thing that can beat them is a dealer blackjack or a dealer hitting to 21.

Really quick, let’s review what insurance is. Insurance is offered to you when the dealer is showing an Ace. Insurance is offered because blackjack is played with everyone assuming that the dealer’s hole card is a 10. Hence insurance is offered. And hence insurance is really a bet of whether the dealer’s hole card is a 10. That’s what insurance really is.

So let’s say that you have been dealt 10-10 and the dealer is showing an Ace; do you take insurance?

No. Insurance is a side bet on whether the dealer’s hole card is a 10. And you have two of those 10s in your hand. Not a bright move.

Insurance overall will cost you more money than you will save, and it’s best to be brave, not take it and play on.

Insuring a $10 bet means putting $5 more out on the table. If the dealer has blackjack you’ll get your $5 insurance back and half of your bet–$5. At the end of that round you get to keep $10 but you have given up $5 to keep that $10.

Overall, insurance is designed to give the casinos more of your money. And unless you know the principle inside and out and know the only times to insure your hand, just decline and play on.