The insurance bet in blackjack is easily the biggest sucker bet in blackjack. In fact, most blackjack books and instructors will tell you that this bet should almost never be taken.
The insurance bet is a side bet that the dealer has blackjack, after seeing that his upcard is an ace. It usually pays 2-1 odds.
Based on mathematical theory and projections, the dealer will have a blackjack only about 4 times in every 13 times he shows an Ace. So, if you were to make a $5 insurance bet on 13 different hands, you would win 4 bets, for a total of $40, but lose 9 bets for a total of $45! In the long run, you’d be losing money with the insurance bet. Think about it, why would a casino offer a bet that they would not have the odds in their favor?
Novice players make the bet because they want to “protect” their blackjack that they have hit. What they don’t think about is that they will win or lose their hand, with no difference, whether they take insurance or not. There is nothing to protect! If you try to protect your 21, and the dealer does have twenty-one, you’ve broken even because you’ve made that second bet of insurance.
A blackjack usually pays 3:2 odds and insurance pays 2:1 odds. So, let’s say you’re betting $5 and get a 21, but want to make the insurance bet (usually half the original bet) of $2.50. If the dealer does have 21, you win $5 on the insurance bet and push on your original bet. So, you’ve bet a total of $7.50 and got back a total of $10 (original $5 bet and $5 insurance bet win), winning $2.50. Now, let’s say you make the insurance bet and the dealer doesn’t have 21. You lose $2.50 on the insurance bet, but win $7.50 on the original bet. You bet a total of $7.50 and got back $12.50, (original $5 and $7.50 win) winning a total of $5.
Why waste the half-bet when it will only win 4 out of 13 times? If you have 21 and the dealer doesn’t (which is most of the time), you’ve given back half a bet. Why throw away half a bet? Don’t take insurance!