Insurance Option

As we have known, the dealer is bound by the house rules and cannot deviate from those rules under any circumstances. For example suppose you're playing head-to-head with the dealer and you turn over your cards by accident. You're holding a 10-2 for a 12 total. The dealer waits for your decision. You stand, that is, you don't draw any more cards to your hand.

The dealer's upcard is a 6. His hole card is a 10. He has a 16, higher than your 12. If he stood pat, he'd beat you and take away your bet. But the rules of the house state that he must draw to all 16s or below, and so he hits the hand and gets a 9 and busts. You win the bet.

Insurance

The insurance bet is the most misunderstood of all the player's options. Most dealers don't know the proper time to take insurance and often will misdirect the player in this regard.

When the dealer shows an ace as his upcard, he will ask the players if they want insurance. He makes this request before peeking at his hole card. What he really is asking the players is this; do they want to bet that he has a blackjack? If he has one, the players win the insurance bet at 2-1. If he doesn't have a 10 in the hole, he collects all the insurance bets, which are now losers, and the game goes on. Insurance pays 2-1, but the player is limited to half his original wager as an insurance bet. For example, if you've made a $50 bet prior to the cards being dealt out, and wish to make an insurance bet, you're limited to a $25 wager.

If you win the insurance bet, this means that the dealer has a blackjack, and so you lose your original bet. But since you're paid $50 at 2-1 on your $25 insurance wager, and lose your $50 original wager, it's a wash.

If you didn't make the insurance bet, and the dealer has a blackjack, you'd lose your original $50 bet. However, if you lose your insurance bet, you still have to play your hand, and may lose that also, causing you to drop 1 ½ times your original bet.

Suppose you hold a 10-2 and the dealer shows an ace. He asks if you want to take insurance. You have your original $50 wager on the table, and now shove out a $25 chip as your insurance wager. The dealer peeks at his hole card and then snatches away your insurance bet. He doesn't have a blackjack. So far you're down $25 on this hand and now have to hit the 10-2. You get a 10 and bust and end up losing $75.

Since the insurance payoff is 2 to 1, never make an insurance bet unless you are counting cards and know that the ratio of non-10's to 10's in the un-dealt cards is less than 2 to 1. This "no-insurance" rule applies even when the player has a blackjack. Many people, including otherwise knowledgeable players, will urge you to insure a blackjack against a dealer's ace, assuring you that you can't lose. They are correct, you will win something but however, in the long run you will win less.