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How Does Blackjack Insurance Work?

February 8, 2022

If you’re new to blackjack, you might be confused the first time you sit at the table and see “insurance pays 2:1” emblazoned on the felt. For most people, thinking of insurance brings to mind protection for their car or home. Well, insurance in blackjack isn’t a million miles away from that; it’s essentially a payment to mitigate losses. However, this time you’re not protecting against fire or theft but instead against a pair of cards.

What is insurance in blackjack?

In blackjack, you can make an insurance bet if the dealer is likely to have a strong hand – namely, blackjack. You will be offered insurance against the dealer having a natural blackjack if the dealer’s upcard (their one face-up card) is an ace. If their face-down card is a 10 or a face card, they have blackjack and will automatically win the hand without dealing further cards.

Assuming no knowledge of any other cards besides the dealer’s ace, there are 96 cards from the remaining 311 (in a six-deck game) that will give the dealer blackjack. This means they will win automatically almost one-third of the time. Players take insurance to mitigate this risk.

How does blackjack insurance work?

So you’ve got your hole cards. The dealer has an ace. Time to decide if you’re going to take insurance. Insurance is a bet worth half of your main bet and will pay out 2:1. Here’s an example of how it works:

  1. You bet $20 on a hand of blackjack.
  2. You receive a 9-6 for a total of 15.
  3. The dealer’s upcard is an ace.
  4. You place an insurance bet of $10 in addition to your original $20 bet.

In this instance, if the dealer has blackjack, you will lose your $20 main bet but receive a 2:1 payout on your insurance bet, thereby breaking even. If the dealer does not have blackjack, you will lose your $10 insurance bet but have the chance to play out the hand as normal to try and double your $20 main bet.

The mathematics of blackjack insurance

As we mentioned, there are approximately 96 cards from 311 (six decks, less the dealer’s ace) that will give the dealer blackjack and allow you to break even on the hand. This means that 96/311 times (61.74%) your insurance bet wins. You break even.

Happy days, right? Wrong. There are 215 cards that the dealer could have that do not result in blackjack, thereby losing your insurance bet 215/311 (69.13%) of the time. That results in the insurance bet carrying a house edge of (0.6913 – 0.6174) 7.40%.

In other words, for every $10 you wager on insurance you can expect to lose $0.74 in the long run.

Should you take insurance in blackjack?

If you want to play in the most optimal way to minimise the house edge, then according to the mathematics of blackjack insurance you should never take it. However, if you are at a live casino and counting cards to overcome the house edge, there are situations in which insurance may be profitable if you know that there are a lot of tens and face cards in the deck.

If you have given yourself a fixed bankroll for the day’s blackjack session (always a good idea) and want to try to prolong your time at the table, then insurance might be a good idea if you have a poor hand and would rather break even against blackjack than lose.

What is the difference between insurance and even money?

After your cards are dealt, you’ll be offered insurance if the dealer has an ace. But what if you’re dealt 21? In this case, if the dealer has blackjack, you will tie and break even, so insurance is redundant. Enter the even money offer.

A natural blackjack will pay 3:2, but tie against a dealer blackjack. The even money offer means that you will take a 1:1 payout on your blackjack regardless of the dealer hand, meaning that you cannot break even. However, if the dealer doesn’t have blackjack, you will be receiving a lower payout than you otherwise would have done.

Other blackjack side bets

Although it’s not strictly in the same category, you can think of blackjack insurance as a kind of side bet. After all, you’re wagering money against an outcome – in this case, that the dealer has blackjack.

Other examples of side bets that might be a little more fun than the nervy wait to see if the dealer turns over a natural blackjack include the following:

Lucky Ladies blackjack side bet

The Lucky Ladies side bet pays out if your first two cards are a pair of tens or higher. The name comes from the huge 200:1 payout you’ll receive for being dealt two queens of hearts.

Super Sevens blackjack side bet

The Super Sevens blackjack side bet will reward you for being dealt any number of sevens. The sevens can be pretty super indeed, with a top payout of 5,000:1 if you receive three suited sevens.

21+3 blackjack side bet

One of the most common blackjack side bets is the 21+3 side bet. This combines blackjack with three-card poker, paying out if your first two cards and the dealer’s up card make a poker hand.