Two kinds of optional wager
Insurance and side bets are both extras you can decline. Neither is part of the core game, and in both cases you are paying a price for a particular outcome. What differs is where the price comes from. Insurance is a bet on the dealer’s hidden card that exists because of the structure of the game. A side bet is a separate game with a pay table chosen by the operator.
Putting them on the same scale, the expected loss per unit staked, makes the comparison easy. All of the percentages below are illustrations built from simple assumptions.
How insurance works
When the dealer shows an ace, players may place an insurance bet of up to half their main stake. It wins if the dealer’s hole card is worth ten, which gives the dealer a natural. It pays 2 to 1, and the main bet is settled separately. The even money offer is the same wager in a different form, offered to a player who holds a natural.
Take the simple approach of an infinite deck, where every draw is independent. Four of the thirteen ranks are worth ten (ten, jack, queen, king), so the chance the hole card makes a natural is 4 ÷ 13, about 30.8%. The wager breaks even at one chance in three, because paying 2 to 1 is fair only if the bet wins one time in three (1 ÷ 3). Expected result per unit staked: (4 ÷ 13) × 2 − (9 ÷ 13) = (8 − 9) ÷ 13 = −1 ÷ 13, an edge of about 7.7%.
In a real shoe that figure shifts a little with the cards already seen, but the shape of the result is consistent. The bet is slightly short of break-even because ten-value cards are just under a third of the pack.
Side bets on the same scale
A few worked figures show the spread. They depend heavily on the pay table and number of decks, so treat them as examples rather than quotes for any table.
| Wager | Illustrative edge | Assumptions |
|---|---|---|
| Insurance | about 7.7% | Very large deck, pays 2 to 1 |
| Perfect Pairs | about 6.1% | Six decks, paying 25, 12 and 6 to 1 |
| Over/Under 13, over | about 6.5% | Very large deck, aces count as one, 13 loses |
| Over/Under 13, under | about 10.1% | Same assumptions |
Insurance and a typical side bet therefore sit in a similar region on a per-bet basis. Neither is a low-cost option. By comparison, the main hand under basic strategy typically costs only a fraction of a percent to around one percent depending on rules. The house edge on optional wagers is often several times greater, and the fair way to compare them is by that single number.
Why insurance costs less in practice
Edge per bet is not the whole story, because the cost per hand also depends on how often a bet is available and how much is staked.
Insurance is only offered when the dealer shows an ace, which is about one hand in thirteen (4 ÷ 52). The most you can stake is half your main bet. Say you took insurance every time at the maximum. The expected cost per hand, measured in main-bet units, would be (1 ÷ 13) × 0.5 × (1 ÷ 13) = 0.5 ÷ 169, or about 0.003 units.
A side bet of the same half-unit on every hand at an edge of roughly 6% would cost 0.5 × 0.06 = 0.03 units per hand. That is about ten times as much, mainly because the side bet is available on every single hand while insurance comes up occasionally.
This does not make insurance a good bet. It means the larger total cost usually comes from the side bets that are always on offer, and that a player who takes both is paying twice.
What changes with the count
Some players who track the cards seen argue that insurance becomes favourable when ten-value cards are unusually plentiful in the remaining deck. That is the idea behind card counting, and it only matters when the share of ten-value cards in the unseen cards rises above one in three. It is a narrow situation. Casinos may refuse service to players they believe are counting, and counting does not make any individual outcome certain.
The side bets covered in this section generally depend on the first few cards only, so they are priced the same way each time unless the shoe composition is extreme. Even then, remember that the shoe is not infinite and that rules and shuffles vary.
Putting it to use
If you want one rule of thumb, it is this: judge every optional wager by its expected value per unit staked and by how often you will be tempted to place it. A bet with a smaller edge but offered constantly can cost more than a bet with a larger edge offered rarely, and the cost accumulates even when no single bet looks costly.
All of these wagers carry a house edge, and short-term results are uncertain either way. Decide in advance how much you are willing to spend on entertainment, and do not use extra bets to try to recover losses. If gambling is becoming a problem, local support services can help.