A basic strategy player should never take insurance. Only a card counter knows when this bet is profitable. If you are dealt a blackjack and the dealer shows an "Ace" simply reply "No, I’ll take my chances!", when you are asked if you would like "even money". You are better off winning 3 to 2 most of the time than winning even money for sure.

When the dealer has an ace up most casinos allow a side-bet called "insurance". Players may bet up to one half of their original wager on whether or not the dealer has a blackjack. If a full insurance bet is made and the dealer reveals a blackjack, the player loses his (or her) main bet and is paid 2 to 1 on the insurance bet. In many locations, hands will be played out entirely before the dealer checks to see if he has a blackjack.

If the player has a blackjack this side-bet is called "even money" because of the net effect of the payoff. Many so-called "experts" will advise players to always take "even money" because it is the only bet in blackjack that guarantees a win! This is true, unfortunately, the amount you give up will virtually "guarantee" that you end up a loser in the long run. As mentioned before, insurance is not advised unless you have knowledge of the dealer’s hole-card or are tracking the cards.

In single-deck the probability of the dealer having a ten as his hole card is 16/51 or 0.3137. The insurance bet is profitable only if this probability is greater than 0.3333. In other words, you should buy insurance only if more than one-third of the unseen cards are 10-valued cards.

Insurance is the most important play variation that is possible for card counters1. Alone it is worth over 30% of all the gain possible to card counters. Unfortunately, this bet can also be the single most important tip-off to the casino that you are an expert player. My advice is that you can not afford to ignore this play variation. In otherwords, when your system recommends insurance you should take it while ignoring the bet otherwise. On the other hand, if you are playing high stakes and there is a concern that demands "some camouflage" you might consider taking "even money" occasionally on medium dollar bets and neutral counts.

"Insurance is the most important
play variation that is
possible for card counters."

Insurance is much more valuable to card counters in single deck than it is in multi-deck games. In single deck, the house has a 5.88% edge where as in 8-decks their edge grows to 7.47%. Most card counting systems advise players to take insurance at some index number (e.g., the Hi-Lo system indices are 1.4 for single-deck and 3.0 for multi-deck games). One of the best methods, however, to make better insurance decisions is with a 10-count2, which relates 10s to non-10s. Such a count is less accurate for estimating advantage so players must maintain it as a second count or have another player provide the information.

FOOTNOTES:

1) From studies by Donald Schlesinger and originally published in Blackjack Forum, September 1986. Also, see Blackjack Review, Summer 1992 for more information on the most important plays in blackjack.

2) Of course, the best method is to have a peek at the dealer’s hole-card! Details on a simple 10-count can be found in Stanford Wong’s book Professional Blackjack (pp 54-56).