Insurance
Insurance is perhaps the least understood of all the commonly available rules for Blackjack. This is not necessarily a bad thing because the insurance bet is normally a poor bet for the player, with a high house advantage.
If the dealer turns an up-card of an Ace, he will offer “Insurance” to the players. Insurance bets can be made by betting up to half your original bet amount in the insurance betting stripe in front of your bet. The dealer will check to see if he has a 10-value card underneath his Ace, and if he does have Blackjack, your winning Insurance bet will be paid at odds of 2:1. You will lose your original bet if you do not have blackjack, so the net effect is that you break even. This is why the bet is described as “insurance”, since it seems to protect your original bet against a dealer blackjack. Of course, if the dealer does not have blackjack, you will lose the insurance bet, and still have to play the original bet out.
In the simplest description, Insurance is a side-bet, where you are offered 2:1 odds that the dealer has a 10-valued card underneath. A quick check of the odds will explain whether the Insurance bet is profitable. In a single deck game, there are 16 ten-valued cards. Assuming that you do not see any other cards, including your own, the tens compose 16 out of 51 remaining cards after the dealer's Ace was removed. For the insurance bet to be a break-even bet, the hole card would have to be a ten 1 out of 3 times, but 16/51 is only 1 in 3.1875. This means that the insurance pays less than the risk that you are taking for the dealer to have blackjack.
The basic strategy player should simply never take the insurance bet, even the even money variety. Card counters on the other hand can often detect situations where more than one-third of the remaining cards are ten-valued, and the bet is then a profitable one. So, unless you know the bet is favourable, just ignore it.
