When playing blackjack online or in a live casino, at some point in time you have most likely been offered insurance. There are a lot of notions out there as to whether insurance is a good bet or a waste. So which is it? Or is it both?

First, let’s take a look at what insurance is.

The way that it is explained to you, is that an insurance bet is to protect you from losing all your money in case the dealer has a natural blackjack. Insurance is only offered when the dealer’s up card is an Ace—one of the cards that is required to have a natural. The reason insurance is offered on Aces and not on ten value cards is because Aces are smaller in number than the ten value cards and less likely to appear.

Now, insurance is really a side bet on whether or not the dealer’s hole card is a ten value card. You are making a 2-1 bet on what that card is. If it is a ten value then you get the 2-1 payout. And if the hole card isn’t worth 10 then you lose your insurance bet.

When looking at all the outcomes of making an insurance bet, you will find that there are three winning situations, two losing and one push. You will win money if you and the dealer both have naturals, if you have blackjack and the dealer doesn’t, and if neither of you have blackjack and you win the hand. You lose if neither of you have blackjack and you lose the hand, and if neither of you have naturals and you tie the hand. The only push outcome happens when you don’t have blackjack and the dealer does.
So three winning chances and one push versus two loses sounds pretty good right? Wrong.

Let’s look at this from a statistical point of view, because, let’s face it, we are dealing with numbers and probability. Like online poker, online blackjack is all about expectations and expected value.

Let’s say we’re talking about an infinite shoe, and since most tables use six to eight decks and online casinos have RNGs, we might as well think of them as infinite. With that number of decks or an RNG, there is a nine-to-four odds against the hole card being worth 10; this is because for every four ten value cards there are nine others.

Now we’ll combine math with statistics. Let’s say that in one year you make a $5 insurance bet 1300 times (considering how often a dealer has an Ace up card that’s a lot of blackjack). Going off of the nine-to-four statistic, you’d win 400 times and lose 900 times.

Translate that into money now. Winning a $5 insurance would give you $10. So if you won 400 times you would have made $4,000. For every time you lost a $5 insurance bet you would lose that $5. So losing 900 insurance bets means that you have lost $4,500. Add $4,000 and a negative $4,500 and you are left with a loss of $500.

And that is why, for the most part, you do not take insurance in both online blackjack and land based blackjack. However, if you’re a card counter, there is an instance when taking insurance can be profitable, but this is another story.