How insurance works
When the dealer's up card is an ace, he offers insurance before checking his hole card. You put up to half your bet. If he has blackjack (a 10 underneath), insurance pays 2 to 1; otherwise you lose it and the round goes on.
Example: bet 10, insurance 5. Dealer has blackjack: you lose your 10 but win 10 on insurance, net 0. No blackjack: you lose the 5, and your hand plays out normally.
The math
Insurance pays 2 to 1, so it would need the dealer to have a 10 underneath more than one time in three (33.3%).
In a 6-deck shoe, after the dealer's ace and your two cards, about 96 of the remaining 309 to 311 cards are 10s: roughly 31%.
| Over 100 insurance bets of $5 | Result |
|---|---|
| 31 times the dealer has blackjack | +$10 × 31 = +$310 |
| 69 times he doesn't | -$5 × 69 = -$345 |
| Net | -$35, about -7% |
Your own hand barely matters: holding 20 doesn't make insurance better, quite the opposite (your two 10s are two fewer 10s for the dealer).
"Even money" when you have blackjack
With a blackjack against a dealer ace, you are offered a 1 to 1 payout right away. It is insurance in disguise: you trade an average win of about 1.04 times your bet for a guaranteed 1. Decline, unless you truly need the certainty.
The only time insurance pays
A card counter takes it when the Hi-Lo true count reaches +3: the shoe then holds enough 10s to beat 33.3%. It is the single most valuable deviation. See card counting.
In the game, counting mode tells you when insurance becomes worth it.
Try counting modeFAQ
Should you insure a 20?
No. It is even worse than with a small hand: your two 10s are out of the shoe.
Should you take even money?
No, it is the same as insurance. Declining pays a little more on average.
What about European blackjack?
Insurance exists there too, with the same math: decline it.