Hey all;

I was just wondering if anyone else out there plays in which the house offers insurance?

I am on the fence as to whether or not it's advisable to take advantage of this service.

For those who don't know what I am talking about: You can buy insurance when people are all in. It usually happens after the flop or turn, but can happen preflop as well.

Example: The flop is 1052 Player A goes all in with A2 and Player B calls with top set. Player B, who is in the lead, now has the option to buy insurance on the turn (Player A has 9 outs to win). Let's say he buys insurance (the money comes out of the pot) and a K comes on the river. Player B can buy insurance again. The river is an 8. Player B wins the pot, but the insurance money goes to the house. If player A won the hand, all of the money would go to him (the house gets nothing).

The reason I'm on the fence is that it can be quite expensive. That said, it also guarantees profit for the guy in the lead - albeit much less.

Anyways, just want to know if anyone else plays with insurance. Thoughts?

If Player A wins the pot, what does Player B get from the house?

That depends on how much insurance Player B bought.

In the above example, the house sells insurance for 9 outs at a rate of 3 to 1. Player B can buy as much insurance as he wants, but he can only get back as much as what's in the pot.

So if the pot was $100 dollars, player be would have to pay ~$33 dollars if he wants the full $100 return. He doesn't have to buy that much; he could buy enough to recuperate the amount of money he committed to the pot, for example.

3 to 1 for one card?

Nice ripoff.

The greatest poker players of our time made their fortunes offering insurance.

That said, buying insurance isn't a terrible idea if you have a limited bankroll, but it's the equivalent of taking even money in blackjack on dealer aces. You lose 3% by taking the deal, but your bankroll goes further.


If you're a casual player, there's no harm in taking insurance provided it comes at a reasonable rate (say, like the ~3% theoretical EV you lose taking even money), but your enjoyment factor has to be better than your bankroll. Taking it at a bad rate, well, that's just like saying, "Hey, I made this good bet, and it'll probably win. Now I'd like to bet against myself with bad odds, so that no matter what I lose expected value."

tl'dr? Sure, but only if you have a small bankroll and making it last is more important than getting the right odds on your bets.

If your house insurance scheme is profitable this could make your game illegal. I'm not sure.

I suppose a way around that might be to let other players offer insurance as well, thus taking away the "house" edge.


If you could get an insurance scheme going I think it would probably be good for the game. Especially if you play a high-variance game like PLO.

The downside is that it would probably take some time to crunch the number and negotiate a price. If you can prepare a spreadsheet or make a program to cover most contingencies that would be nice.

Insurance is always a good deal for the insurer.

Sorry, I should have been clearer in the original post. I am not questioning the legality of it (it's definitely illegal), I'm just wondering if any players have had this experience before and what their thoughts were regarding the financial side of things.

And the insurance rates are standard wherever I go. One out pays 32 to 1, two outs pays 16 to 1, three outs pays 10 to 1, etc. Players have the option of offering the insurance, but the rates are the same what the house offers.

As Palimax said, unless you're playing outside of your comfort zone, it's a bad deal for the player.

On the turn, with one out to go, and both hands tabled, there are 44 unknown cards. The odds of the one out hitting are 43:1, but the insurance is only 32:1. The odds of two outs hitting are 21:1, but the insurance is only 16:1. The odds of three outs are almost 14:1, but the insurance is only 10:1.

Were I rolled for it, I'd offer to be the insurer every single time. It's like printing money.

Poker players should know not to take the bad end of a bet.

to be this standard, you're either in NY or NV... or CA?

Here's the way I'd look at it: at a casino, when you're waiting for a game, or on a break... are you playing the 3-card poker and BJ tables that are nearby?

I'd approach 'insurance takes' as the exact same thing: Do I wanna gamble with the house, or not? Because there's almost no chance that I'm making a positive EV bet here.

The insurance bets are, in effect, almost COMPLETELY SEPARATE from the poker hand going on. If you'd take insurance in BJ or baccarat, or hedge a sports bet...then maybe the same mentality plays here.

Long term, yes, with a big enough financial cushion.

Short-term? I have a few natural disasters, and financial calamities, that we should dicuss...

What you're saying is you're not properly rolled to gamble with your house (or car, for that matter)?

That's what insurance does. It allows someone underrolled to reduce variance enough to take bigger gambles. If, on the other hand, you're properly rolled, offering insurance is a way to rent out your bankroll for profit. It's just another +EV, high variance bet.

Fortunately for the poker insurer, hands are played out sequentially (whereas, say, a home insurer has multiple customers subject to the same bad event).

Volume.

Yeah, yeah, I obviously sequeued....

critics