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.