Insurance (Blackjack)
A side bet offered when the dealer shows an Ace, paying 2:1 if the dealer has blackjack.
Insurance is a side bet offered when the dealer's upcard is an Ace. It costs half your original bet and pays 2:1 if the dealer has a 10-value card in the hole (making blackjack). It's designed to "protect" your hand against the dealer having blackjack.
Despite the name, insurance is almost always a bad bet. The true probability of the dealer having a 10 in the hole is about 30.8% (in a standard shoe), but the 2:1 payout implies a break-even probability of 33.3%. This gives the house a significant edge on the insurance bet.
The only exception is for card counters: when the count indicates a high proportion of 10-value cards remaining, insurance can become a +EV bet.
Related Terms
Basic Strategy (Blackjack)
The mathematically optimal play for every possible hand in blackjack.
Card Counting
A strategy for tracking the ratio of high to low cards remaining in the deck to gain an edge.
House Edge
The mathematical advantage the casino has over players, expressed as a percentage of each bet.
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