Insurance

Whenever the dealer's face up card is an Ace you may buy insurance. The dealer will ask all the players at the table if they want to do so. Insurance costs half your initial wager, but if the dealer gets a Blackjack insurance pays 2-to-1. You just lose your initial wager. If the dealer doesn't get a Blackjack you lose your insurance and the game continues. Either way, you come out even. Remember that you must buy insurance before making any other decisions. There is a heated argument when it comes to insurance. Some players whole heartedly support it, while others say that it is never a good idea to buy insurance.

What should you do if you are dealt an Ace and a 10 and the dealer has an Ace? Most players take insurance in this case. They already have a blackjack that pays at a ratio of 3-to-2. But if the dealer will also get a blackjack the game will tie and all bets will be pushed. Why take a chance and not win anything since you have been dealt a blackjack?

Most players believe that by taking insurance they will come out on top. In fact they are mistaken. In any deck of cards there are exactly 16 ten valued cards and 36 cards with other values, different from one. So the chances to get a blackjack are 2.25 to 1. After the cards have been dealt and you got a blackjack and the dealer got an Ace there will be only 15 ten valued cards in the deck and only 34 cards of other values, different from ten. The player's ratio in this case is 2.27 to one. Insurance bets only pay at a ratio of 2-to-1, so if you do take insurance you will make a losing bet.

There are only 4 possible chains of events if you are dealt a blackjack and the dealer has an Ace. Let's see what they are for a bet of $20:

• You place an insurance bet and the dealer will get a blackjack;
• You place an insurance bet and the dealer will not get a blackjack;
• You do not place an insurance bet and the dealer will get a blackjack;
• You place an insurance bet and the dealer will not get a blackjack.

For the first two situations the player will win $20. If the dealer will get a blackjack then the player will win 2-to-1 on his insurance but lose his initial wager. If the dealer doesn't get a blackjack then the player will win 3-to-2 on his wager, but will lose his insurance bet. In both cases the total amount that he will win is $20.

In the third situation all bets will be pushed since both you and the dealer have blackjack. You will win nothing; you will only get your initial bet of $20 back.

In the fourth situation you win the most. Since the dealer did not get a blackjack you will be paid at a ratio of 3-to-2. This means that you will win $30. You have made money in 3 out of 4 situations.

After the cards have been dealt and you got a blackjack and the dealer got an Ace there will be only 15 ten valued cards in the deck and only 34 cards of other values, different from ten. For the dealer to tie the game he must also get a blackjack. But to get a blackjack he must get a ten the first time he draws. He has a 30.6% chance of getting that ten and a 69.4% chance of not getting it. We can thus conclude that the second and the forth situation are most likely to occur.

When playing blackjack you must make sure to always take the most profitable decision. The most profitable decision is the one that has the highest chances of taking place. You will increase your edge by 4.1% if you always make the most profitable decision and do not take insurance.

If you use basic strategy you will see that buying insurance is not suggested in this case. In fact the only time when you should take insurance is if you have been counting cards.