Many online casino games offer bets that are optional. You can place the bet if you want to, but you do not have to. The first thing you have to understand you are in no way obliged to place these bets. You must evaluate these bets as to their risks and returns and take a considered decision.
One such bet is the Insurance Bet that is offered in many variants of online blackjack games. You can place this bet only if the dealer’s face up card is an ace. This bet gives you a chance to restrict your losses in case the dealer eventually hits a blackjack. Hence it is called Insurance Bet. If you want to exercise this option then you have to bet half the ante bet. The bet is decided when the dealer’s hole card is checked. If the hole card is a ten value card, then the dealer gets a blackjack and your Insurance Bet pays out 2 to 1. When this happens you will loses your ante bet and end up quits. If the dealer does not have a blackjack then you lose the Insurance Bet and may win or lose the ante bet depending on the cards dealt.
A rigorous analysis of the mathematics of the Insurance Bet is complicated. The process is being illustrated using the simple example of a single deck game. Assume that your cards are five and three and the dealer’s face up card is an ace. The Insurance Bet will win if the dealer’s hole card is a ten value card. There are 49 cards left, out of which 16 are ten value cards. Therefore the probability of the bet winning is 16/49 or 0.327. Since the bet pays 2 to 1, the mathematical expectation is (2 x 0.327), which 0.654. Out of the 49 cards 33 of them do not have a value of ten. Therefore the probability of the Insurance Bet losing is 33/49 or 0.673. When this happens you lose the Insurance Bet and the mathematical expectation is (-1 x 0.673), which -0.673. Hence net expectation is (0.654 – 0.673), which is -0.019. A negative net expectation implies that you will expect to lose money on this bet in the long run.
The effect of the Insurance Bet is that it increases the house edge on the total online blackjack game and hence should never be placed. When prompted about the Insurance Bet just click No and continue with the game.