Blackjack insurance is only offered when the dealer is showing an Ace. It is offered as a protection against the dealer turning a blackjack. If you take the insurance (half your stake) and the dealer does indeed have a blackjack then you receive a 2/1 payout on your original stake.
You’ve lost your bet but gained the insurance. The net result is break even.
Let’s show you how this works:
You make a £10 bet and the dealer shows an ace so you take the offered insurance which is a £5 side bet.
The dealer turns over a face card and has blackjack so you lose your £10 bet, but you win the insurance bet which pays out £10 so you break even. So far so good, you’d think that you should take insurance every time the dealer shows an ace.
But wait! There is more to the insurance bet than meets the eye and have you seen all those swanky motors in the insurance company parking lot? There’s a reason companies make a lot of money out of insurance!
Some simple maths will show you why taking Blackjack is a bad idea and simply a ruse by the house to extract more money from you:
The dealer will make a blackjack roughly 30% of the time. This means that 70% of the time you’ll lose your insurance bet. It’s not entirely scientific as the percentage also depends on how many other players are in the game and what other cards have been >dealt but it’s accurate enough to do a forecast.
Let’s see what happens based on a £10 stake and betting this scenario 100 times:
- Your total stakes will be 100 x £10 which is £1,000;
- You will win the insurance side bet 30 times which pays at 2/1 £5 x 30 = £150;
- You will lose the insurance side bet 70 times £5 x 70 = £350;
- Your total winnings would be 30 x £10 = £300;
- Your total losses are 70 x £5 = £350.
Overall you are in the hole for £50
Some players will argue that you should place insurance for larger than average bets but that just shows a lack of discipline in their own bankroll management, taking insurance is never the right option.
The next time the dealer offers you insurance you can politely decline with the knowledge that in the long run, only the house makes any money out of it. Another insurance scam exposed!