Should You Take Partial Insurance?

Article by Mike Anderson

I have clarified some things from the original posting, mainly that there are benefits to taking partial insurance although it’s not the optimal EV play.

In the game of black when the dealer has an Ace showing you have the options of placing an additional side bet of called the insurance bet.  It is usually signified by the dealer asking: Insurance anyone? And is no longer offered when the dealer says: Insurance is closed.  What you are betting on in the insurance bet is whether or not the dealer has a 10 as their hole card for a blackjack.  It pays of when the dealer has the natural.

This wager has a maximum bet of half the initial wager.  If your initial wager is 100 dollars then the maximum value of the insurance wager is $50.  The insurance wager has a payout of 2:1. This means that the $50 wager pays $100. When you win the insurance wager you lose the initial wager, so in most cases the cumulative wager for the round is a net push.  In cases where the player has a blackjack against a dealers Ace up card, taking insurance is also called even money.  This is where the player gets a return equal to that of their initial bet.  Even money is one option a player can take to reduce the variance that they may experience.  You are giving up some EV here but it will reduce the financial swings.

In the first paragraph I stated that the maximum insurance bet that a player can take is one-half of the original wager.  There is no rule that prohibits a player from placing a wager less than the maximum wager.  Doing this is known as taking partial insurance.  Partial insurance can be used as a hedge bet of sorts.  The benefit of taking partial insurance is to reduce the variance that a player will experience.  For anyone who has put any significant time in as an advantage gambler knows that the financial swings can be violent and can try the boundaries of your own sanity. So anything we can do to reduce these swings we take advantage of. It’s better for your bottom line, and even better for your mental state.

The foundation of partial insurance for blackjack can be applied to online casinos as well as land based casino.   In the online realm reducing variance is desirable because it allows you to prolong your free play offers that are used to lure players into playing.   An online casino will offer free play to new and returning players in place of the traditional RFB comps.  For instance 888casino is an exciting live casino with real dealers offering Live Roulette, Live Blackjack, Live Baccarat, Casino Hold’em, Three Card Poker and Caribbean Stud Poker, and they have huge selection of tables for each game. Some signup bonuses are specific to certain games while others can be used on every game the casino offers. Depending on how often you play and the wagering amount the promotional offers will vary.  When you get these offers from online casinos there are restrictions before you can withdraw the amount. The player has to play a certain number of rounds before withdrawing funds. When playing the minimum number of rounds you want to reduce the variance that you will experience during this short term play so you get the most return on the free play.  Taking partial insurance is a good way to do that.  You reduce the chances of winning more money but you also reduce the chances of losing all of the free play money.

The mathematically optimal way to play the insurance bet is bet it when the number for the given count is reach.  The index numbers provided are dependent on the card counting system being used.  Taking partial insurance reduces the EV that can be expected but it also reduces the variance.  One of the most efficient counting systems is the Uston APC count.   And it is the count that I will be using to apply the partial insurance index numbers to.  The values assigned to each card for the Uston APC count is in the table below.

Table 1- Uston APC Values

Card Value
2 1
3 2
4 2
5 3
6 2
7 2
8 1
9 -1
10 -3
Jack -3
Queen -3
King -3
Ace 0

 

The values are added up to determine the running count and then normalized to a ½ deck resolution.  For example if there is running count of +15 and 1 ½ decks remaining the true count is 5.  15 divided by 3 equals 5.  Also it should be noted that a side count of Aces is kept to help determine the betting amounts.  It is not kept to determine the playing options of hitting, standing or doubling or splitting.  Aces have a value of +3 for each Ace that the ½ deck segment is rich and -3 for each ½ deck segment is poor.  The base line is 2 Aces per ½ deck.

The table below lists the % of full insurance that is to be taken against various hands that a player can have.

Hand(s)   None 25% 50% 75% Full
BJ & Any 20   > 0.5 1 < 1.5 1.75 2
Any 19, AA, Hard 11, Hard 10   1 1.5 1.75 2 2.5
Hard 8-9, Any 18, A2-A6   < 1.5 1.75 2 2.5 2.75
Hard 4-12, & 8,8      1.5 > 1.75 2.25 2.5 3
Hard 13-16   > 1.5 2 > 2.25 2.75 3

 

Take the indicated % insurance at the appropriate Index #.  > indicates slightly above INDEX #; < indicates slightly below the INDEX #. The index numbers essentially determine the remaining composition of the cards yet to be played.  The remaining composition of cards to be played is the basis for gaining an advantage over the house.

Taking partial insurance should be taken to reduce the variance a player may encounter during play. But it will also reduce the maximum EV.   This helps reduce emotional swings as well as bank roll swings a player will encounter.  This also will add to the confusion of the surveillance crew as they try to evaluate your play to see if you are an advantage player.  It will require a little bit of work to implement but it is well worth the effort for a better mental state and increased longevity.

Special thanks to casino gaming expert Nicholas G. Colon for his review and comments on this piece.

Also to LV BEAR and ZIPPY for helping me clarify my insights

 

What are the Odds of Losing 6 Hands in a Row?

Among emails I receive, a fairly common question is something like this:

Can you tell me the odds of losing six hands in a row at blackjack?

Sometimes it is 5 hands, sometimes 8, sometimes more.  No matter, I cringe whenever I get this question.

To me, it’s like an airship designer asking a chemist: “Does hydrogen weigh only half as much as helium?”   We all know how THAT turned out.

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Why Does The Number of Decks Matter in Blackjack?

Fewer Decks are Better. Do You Know Why?

When it comes to the number of decks in a blackjack game, the fewer the better. Most players have heard this fact somewhere along the line, but many of them don’t know why fewer is better.

I often get this question by email, where players will note that the proportion of each rank of card is the same whether the casino uses a single deck or shuffles six decks together. Regardless of how many decks are in play, we start out with one thirteenth of the cards being Aces…

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The State of Blackjack – Opportunity Amidst the Apocalypse?

A Tale of Two Cities
Charles Dickens may as well have been describing recent developments in casino blackjack…

“It was the best of times, it was the worst of times.”

Rules and conditions at casino blackjack tables have been steadily declining for years, and there are a lot of really bad games out there.

6:5 Has Spread Far and Wide

I just tallied up the games offered in Las Vegas, based on the latest issue of Current Blackjack News. A depressing 40% of the regular blackjack tables in Las Vegas now pay only 6:5 for blackjack.

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Ken Smith on Gambling With an Edge Podcast

Gambling with an Edge

Earlier this year, I was the guest on the Gambling With an Edge radio show in Las Vegas. I mentioned it in the BlackjackInfo email newsletter, but I just realized that it never got posted here on the blog.

The show includes a couple of stories that I think BlackjackInfo visitors will find interesting. I describe one play where I won over $100,000 on a single hand of cards, and another play at a 2:1 blackjack promotion that yielded a big profit along with an uncomfortable situation.

You can listen to the show, and see more details at Gambling With an Edge.

Learning Card Counting Indexes? Don’t Make This Mistake

Index Numbers

Once you have basic strategy committed to memory, and you have learned to count cards and vary your bet, the next step in fine-tuning your game is to add strategy variations using index numbers.

When I first began to learn about strategy variations, I found them confusing.  Based on the number of emails I get on the topic, I know that I am not the only one.

I was especially confused about the way indexes are presented.  I thought I could see a better way.  But eventually I switched to the standard method, and it definitely has its benefits.

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Blackjack Player Sues After Losing $500,000 While Drunk

Martini

For players, free drinks are an important part of the casino experience. For casinos, serving free cocktails generates a nice return on investment.

This week, a 52 year old California man filed suit against the Downtown Grand Casino in Las Vegas, alleging that the casino continued serving him drinks and extending gambling credit to him after he was obviously intoxicated. He went on to sign markers for $500,000 and lost it all, not realizing how much he had lost until he awoke the following day.

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Double Down on a 6:5 Blackjack? Read This First…

Bad Choice

The plague of 6:5 blackjack has been well documented here. (See 6 to 5 Blackjack? Just say No! and The Casino Floor as a Minefield.)

If you have any other game choices available, you should not be playing a game that pays only 6:5 on blackjack.

Yet some players do play these games. Don’t worry, I’m not going to chastise you if you sometimes play these games. But I do want to make sure that you are not making a bad game even worse…

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16vT: RS WTF?!

Equations

Forgive the cryptic title. I couldn’t resist.  So, what does it mean?  16vT is shorthand for the player hand of sixteen against a dealer upcard of Ten.   “RS” is a strategy abbreviation.  “R” means SuRRender, and “S” means Stand.  So, “RS” means Surrender if you can, otherwise Stand.

And of course, WTF is an abbreviation of the message I often get via email when someone thinks they have found a mistake in the strategy provided by my Blackjack Basic Strategy Engine.

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