Blackjack Insurance Explained: Why You Should Decline It

Sixteen of the fifty-two cards in a deck are worth 10 (the 10, jack, queen and king of each suit). In a fresh four-deck shoe with the dealer showing an ace and you holding two non-10 cards, 64 of the remaining 205 cards are 10s, about 31.2 percent. Insurance pays 2 to 1, so it breaks even only when the chance of a 10 is one in three, 33.3 percent.

At 31.2 percent the bet loses about 6.4 percent of its stake on average. If you are holding a 10 yourself the odds are worse, because one of the 10s is already in your hand. The only time insurance is profitable is when you know the remaining shoe is unusually rich in 10s, which is exactly what card counters track.

When you have a blackjack and the dealer shows an ace, the dealer will offer 'even money': a guaranteed 1 to 1 payout instead of risking a push. Taking even money is mathematically identical to taking insurance on your blackjack. You give up the 3 to 2 payout 69 percent of the time to avoid a push 31 percent of the time.

Declining even money earns 1.5 units 69 percent of the time, about 1.04 units on average. Taking it earns exactly 1 unit. Over many hands, declining is worth about 4 percent more. It feels worse when the dealer turns over a 10, but that feeling is the price of correct play.

Players most often take insurance when they hold 20 or a blackjack, reasoning that they want to protect a strong hand. But the strength of your hand has no effect on the insurance bet, which only depends on the dealer's hole card. Worse, holding two 10s removes two of the cards you need, making the insurance bet slightly less likely to win.

Conversely, some players insure a hard 16 'because they will probably lose anyway'. The insurance bet is still 6 percent negative. Your main hand's prospects and the side bet's prospects are independent; a bad main hand does not make a bad side bet better.

A Hi-Lo counter takes insurance when the true count is +3 or higher, because at that point more than a third of the remaining cards are 10s and the bet becomes positive. This is the single most valuable count-based deviation in the game, worth more than all the hit-stand index plays combined.

If you are not counting, the answer is simply never. Decline insurance, decline even money, and play the hand according to the chart against the dealer's ace.