Blackjack insurance guide

Blackjack insurance always gets pride of place at the table, even though it’s not really part of the game! But how well do you know this side bet, and when is it best to make use of it?

In this guide we’ll look at how insurance works when you play blackjack, reveal the numbers beneath the hood and answer the million-dollar question – when should you take insurance in blackjack?

What does insurance mean in blackjack?

In blackjack, insurance is a side bet that may be offered to you when the dealer’s up card is an Ace. Insurance is simply a bet that the dealer’s next card is worth 10, and they make Blackjack. But why would anyone bet on the dealers hand being Blackjack?

Insurance is often seen, mostly because of the name, as a hedge against a dealer Blackjack. Yes, it’s true that players can use winnings from this side bet to offset the loss of their main hand, but there’s more to insurance in blackjack than a simple hedge.

Despite clever marketing from way back when land-based casinos were king, insurance is actually an entirely separate bet which has nothing to do with your hand or your prospects of beating the dealers hand.

Blackjack insurance was invented by casino bosses who liked the sound of inserting a new side bet during a game of blackjack. The name, betting and payout structure were all designed to appeal to players who were worried about the dealer making blackjack, and who might be willing to pay a little more for the chance to come away even, despite losing their main hand.

Insurance in blackjack comes at a cost, and there are more outcomes than simply breaking even, as you’re about to discover. Ultimately, when asking what does insurance mean in blackjack, the answer is not about protecting a good hand or even salvaging something from bad initial hands.

It’s just a very basic, stand-alone bet at odds of 2 to 1 that the dealer’s second card will be a 10 or face card.

The rules of insurance in blackjack

It’s not written into blackjack lore that insurance should always be available, but in reality insurance is offered at the overwhelming majority of blackjack tables offline and in real money online casinos.

Although blackjack rules differ between countries, casinos and even tables, you can bet OJO’s bottom dollar that the blackjack insurance rules will always be the same.

How does the insurance rule work in blackjack?

When it comes to blackjack side bets, insurance is unique for 2 reasons. Most side bets literally happen on the side of the game, and you bet whatever you like. With insurance, it’s only available in a specific situation after a hand has begun. Secondly, you must bet a specific amount. As a result, insurance neither looks nor smells like a side bet, but it is one nonetheless.

Here are the 3 fundamental rules of blackjack insurance:

Dealer up card must be an Ace

Dealer up card must be an Ace

Costs 50% of original bet

Costs 50% of original bet

Pays 2 to 1 if dealer makes Blackjack

Pays 2 to 1 if dealer makes Blackjack

Opinions on blackjack insurance vary from player to player. To some it’s a way of reducing variance when you play blackjack, smoothing out the natural swings that luck brings to this much-loved card game. To others it’s a side bet with a bigger house edge than the casino games it lives off.

With other side bets, you can win your main blackjack hand AND the side bet. This isn’t possible with insurance, as you’re hedging against your own hand. If you correctly bet that the dealer makes Blackjack, your own hand will automatically lose.

On the flipside, it is possible to lose the insurance bet AND the main hand, costing you a total of 1.5 betting units. This may be another reason that more experienced blackjack players always decline insurance.

The Even Money rule in blackjack

Insurance gets interesting when you’ve already made Blackjack yourself. You’re now looking at a juicy 3 to 2 payout, so long as you can fade a dealer’s Ten. While insurance claims to be all about avoiding a loss, it’s not much use when you’ve got the best possible hand and can’t lose.

That’s where Even Money comes in. If you can’t lose, why not insure yourself against a push by taking a smaller, guaranteed win?!

Although Even Money is an offer, rather than a side bet with 2 possible outcomes, the maths, house edge and results are identical to insurance. Once again, it’s more clever marketing based on the old saying that ‘a bird in the hand is worth 2 in the bush’.

Examples of insurance in blackjack

Insurance adds a second bet to the mix, and the dealer will settle both them independently. Players who take insurance when they play blackjack will get their 1.5 units back around 30% of the time, so it’s worth understanding what happens in all of the other scenarios too.

In each of these examples, the player is playing a game which pays 3 to 2 for Blackjack. She has bet £10 on her main hand and paid £5 to take insurance for a total bet of £15.

Dealer makes Blackjack, player’s hand loses
Dealer does not make Blackjack, player’s hand wins
Dealer does not make Blackjack, player’s hand loses

If the player has Blackjack and the dealer has an Ace, they’ll be offered Even Money instead of insurance. We’ve already learned that although it has a different name, Even Money produces the same outcome as insurance would.

Remember, if you bet £10, make Blackjack and then accept Even Money, you get £20 back for a profit of £10. If you turn down Even Money and the dealer makes Blackjack as well, it’s a push and you get your money back.

If you turn down Even Money and the dealer doesn’t make Blackjack, you get the all-important 3 to 2 payout and make a profit of £15.

To illustrate why Even Money takes a different route but ends up at the same destination, here’s how it would look if a player took a theoretical blackjack insurance bet instead.

Dealer does not make Blackjack
Dealer makes Blackjack

In both cases, the players wins £10. Casinos recognised there’s no edge to be made or fun to be had in a side bet with the same result! Instead, Even Money creates the same conundrum that sportsbooks use for their Early Cashout offer.

How it works at the table

The first thing to bear in mind when you’re choosing a table is the rules. The blackjack insurance rule and its odds will usually be printed in large lettering on the felt.

If the dealer shows an Ace, he will ask each player in turn if they’d like to take insurance. If you’re playing multiple hands, you can choose whether to take insurance on each separate hand.

In a land-based casino, the dealer will gesture in your direction and ask if you’d like insurance. A simple shake or nod of the head will be good enough to let them know what you want to do. If you’re playing online blackjack and insurance is available, YES or NO buttons will appear near to each of your hands.

Once all players have chosen to take or decline insurance, the game continues with each player taking their turn to play their hand.

When everyone’s finished, the dealer deals their second card and settles any blackjack insurance bets that have been placed. In some casinos, the dealer will deal their second card face down and peek once the insurance round has ended, and then settle those bets first.

A quick maths lesson on blackjack insurance

Although typical blackjack casino games have a house edge of less than 1%, the house edge for the insurance side bet varies from 5.8% in a single-deck game to over 7.5% in an 8 deck game.

As you can probably guess, the true probability of the next card being a 10 is lower than the probability implied by the payout odds.

Let’s keep things simple by using a single-deck game where the players’ initial hands are unknown. We know the dealer has an Ace, which means there are 16 cards left in the 51-card deck that are worth 10 (4 Tens, 4 Jacks, 4 Queens, 4 Kings).

16 / 51 = 0.3137 = 31.37% chance of a Ten

In general, if you place a bet that pays out 2 to 1, it only has to win 33.33% of the time for you to break even. But in the game above, the dealer will draw a 10 just 31.37% of the time. That difference of 1.97% may seem insignificant but it translates to a house edge of 5.8%.

Is there ever a good time to buy insurance?

When should you buy insurance in blackjack?

OJO believes players should be free to do whatever they please, and some players just like blackjack insurance in certain situations. Period. But our blackjack guide is here to show you the smart way to play, so here comes the unvarnished truth!

When should you buy insurance in blackjack is a common question, especially as this side bet is offered so frequently. The simplest and best blackjack strategy for insurance is simply to always say no if you’re playing for real money.

At between 4-8% on average (and as high as 14% if lots of Tens have already come out), the house edge compares poorly to the very competitive house edge of blackjack itself.

However there are 2 situations where the optimal blackjack strategy for insurance might change.

#1: Counting cards

Learning how to count cards is the only way to make the insurance side bet profitable. Insurance is a bet on the value of the dealer’s second card, so if you happen to know there are more 10s in the deck than usual, you’re onto a winner.

The most popular card counting systems recommend that when the true count is +4 – indicating a deck rich with Tens – you take insurance.

Put simply, if you only take insurance when there is greater than 33% chance of a Ten coming out, you’ll make a profit in the long run. This rule of thumb is not useful when you play blackjack at online casinos, as the cards are ‘shuffled’ by the RNG after every hand.

#2: Reducing risk in a single, high-stakes hand

Blackjack is all about the long run. Provided you practice sensible bankroll management and betting strategies, no single hand should ever matter so much that you deviate from basic blackjack strategy. But for argument’s sake, let’s say a player decided to play one hand of blackjack in their life, and then quit.

They are dealt Blackjack (*let’s all do the conga! Let’s all do the conga!*) but the dealer is also dealt an Ace (*booooooo*). In that situation, being able to book a guaranteed win by accepting Even Money might sound more appealing, given there will be no ‘long run’.

A summary of insurance: Don’t be fooled

Don’t fall for the marketing. Blackjack insurance is not a way to protect anything, as there’s no guarantee you will. 

The fact you can take insurance and still lose both that side bet and your main bet is reason enough to give this feature a wide berth, or at least know what you’re getting into before you do.  

Blackjack is so popular partly because of its incredibly small house edge, provided you play well. To me, there is little point in adding side bets with much higher house edges into the mix, unless they add significantly more fun and bigger payouts, like with the Perfect Pairs side bet. 

Insurance doesn’t qualify on either count, but at least you now have all the info you need to make your own mind up!  

Daniel Grant

Dan Grant has been writing about gambling for 15 years, and been fascinated by beating the odds for even longer. Now he’s on a mission to help others bet smarter and avoid the mistakes he made. When he’s not obsessing over bankroll strategy or counting cards badly, he’s hosting The OJO Show podcast.

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