Blackjack Insurance and Even Money Explained

On this page we’ll try to debunk the myths surrounding Blackjack Insurance and Even Money bets and explain why they are considered a sucker bet. These two bets are practically the same, their purpose is to insure yourself against dealer having a blackjack. The only difference is your hand value in each particular situation: if you have a natural then you are offered even money, in all other cases – insurance.

Blackjack Insurance

If the dealer’s face up card is an Ace, and you don’t hold a blackjack, then you will be offered to place insurance bet, which can be worth up to half of your original bet. Then, if the dealer reveals a blackjack, you lose your original bet, but paid 2 to 1 on the side bet. That’s the reason why this is called insurance, because it protects you from dealer’s blackjack. If on the other hand, the dealer doesn’t pull a 10-value card, you lose the insurance bet, while your original wager is settled in a usual way.

Insurance Rules and Odds

1. First, it’s important to understand that insurance is a side bet, meaning it has no influence on your original wager, which in either case will be completed as usual. Similar to all side bets, it carries higher house edge than the basic game.

2. Second, whether insurance is a good or a bad has nothing to do with the value of your hand. Insurance gives you a chance to protect yourself against a dealer’s blackjack and it makes just as much sense to insure on 17 as it does when you have a hand totaling 20. Whether you win or lose the side bet depends solely on the dealer’s hole card, while your hand wins or loses regardless of whether or not you take the insurance bet.

3. Furthermore, you know the dealer will get blackjack around 4 out of 13 times, which is 31%. Since you’re getting 2-1 odds on insurance, you need to be right 1 out of 3 times. In other words, you need to be right 33% of the time just to break-even and that’s not going to happen.

Example

Let’s say that you place a $5 insurance bet 13 times. You will win 4 times earning $40 ($10×4). You will lose 9 times – $45. Final result: minus $5, which means that in the long run, you will lose 7.7% on all your insurance bets. Doesn’t really sound like a smart move.

Are there any exceptions: if you are counting cards then yes. See the last chapter.

Even Money

If the player has blackjack and the dealer is showing an ace, then the player will be offered even money, which means getting paid 1 to 1 on blackjack rather than the usual 3 to 2. If the player doesn’t take even money and the dealer gets blackjack, then we get a tie which results in push. Even money is basically insurance against a push when you have blackjack. Taking this bet guarantees that you will get a payout, but after a quick check, you will find that even money is a horrible bet.

Even Money Odds

Let’s analyse both scenarios: First, the dealer is going to push on your blackjack around 31% of the time. The probability of the dealer getting a Ten, Jack, Queen, or King can be counted by seeing how many of these cards are in the shoe. There’s four of each card, meaning there are 16 cards out of the 52 in the deck to give dealer a blackjack. Even with more decks in the shoe, the probability remains pretty much the same, which is a bit less than 31%. (We will ignore those minor differences in order not to complicate things). Thus, your chances of winning and getting a payout of 3 to 2 are 69% of the time (actually a bit more than that).

Let’s take a closer look at the difference in payouts when you take and don’t take even money. If your original bet is $100, then the expected value of taking even money is $100. That’s simple to understand.

If you don’t take the even money bet, then as we’ve already established, you have a 69.24% chance of getting a 3 to 2 payout. So the expected value of your hand is 69.24% x $150 = $104 (actually a bit less but you get the point).

So for a $100 bet, you’re better off by around $4 if you refuse the even money. It’s that simple. Of course, the casino is happy to offer this option and increase the house edge, and you will kick the table every now and then for not getting paid 3/2, but once the dust settles, you will end up with more chips in front of you and that’s all that counts.

When it’s Worth Taking Insurance or Even Money?

There is one exception to this rule and that’s when the odds of the dealer to get a 10 value card are higher than 33%. The only way you can spot this opportunity is by counting cards. For example, in a single deck game, if you know that one 10 value-card is out, vs. 7 non-10 value cards, dealer’s odds of getting a natural are 15/44, or 34%. In that case insurance and even money are beneficial.

We state that just to complete the picture, but unless you are a card counter, never take insurance in Blackjack.