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Take quizInsurance in the world of gambling is a term usually associated with the game of blackjack, where the house offers insurance to players in certain scenarios. Taking insurance in blackjack is not a good idea, as it generates negative EV and makes you lose even more money in the long run than you actually need to.
However, this is not to be confused with insurance in poker, which is a completely different phenomenon and can often be subject to negotiations and deal-making.
Poker insurance is not an integral part of the basic rulebook of the game, which is why you may not have encountered it in your games in the past.
However, whether you have seen insurance invoked in TV poker shows like Poker After Dark or seen it more recently at online poker sites, you are probably wondering how exactly it works.
This article will teach you what poker insurance is, when you can take it, and how it works. We will also explore whether you should take insurance in poker and when it could be a good deal.
Poker Insurance Explained
The first thing we must say about poker insurance is that it can only exist in cash games. Tournament poker pots can’t be insured, so if you only play tournaments, don’t expect to ever be able to use this option.
In cash games, the insurance option allows you to insure your money when you are all in against another player, and you are a favorite to win the hand.
The insurance can be purchased from the house, the player you are playing against, another player, or even a bystander willing to give it to you.
In each case, the insurance will include a premium and a payout. The premium is the amount you will need to pay to the entity giving you insurance if you win the hand, while the payout is the amount they will owe you in case you lose the hand.
The cost of the premium and the value of the payout will be determined based on your equity in the pot. The higher your winning chance, the less of a premium you need to pay, and the higher payout you can expect if you suffer a bad beat.
While ideal insurance would guarantee you get paid exactly your equity in a pot, the truth is that insurance never works exactly that way unless you can negotiate it with the player you are up against.
In most cases, you will have to pay at least a little extra to get the insurance, which means you will end up paying something to insure your hand.
This can still be well worth it in huge pots in private cash games, where you may be only a slight favorite for a massive pot or even a 70/30 favorite for the biggest pot of your career.
Insurance allows you to reduce variance at a premium and make sure you don’t go bust in a single hand you didn’t even misplay but just got unlucky in.
As we already discussed, poker insurance is not something that's set in stone, and various players may approach it differently in different scenarios.
A very clear-cut example of insurance in poker would be something as follows:
You could also chop the pot up without running the rest of the board, but many casinos or poker clubs won’t allow this, which is why you must negotiate insurance.
Here is another way this exact scenario could go:
In this case, you are getting a slightly worse deal from another player in the game. This player needs the incentive to give you insurance, so he is only doing it if the odds favor him.
The extra 5% you need to pay in this spot is certainly not good value for you, but sometimes players will take such a deal to protect their stack in a cash game.
Finally, an insurance scenario could even go this way:
The other player knows he has slim odds of winning the hand, so they agree to these poor odds to stay in the game and get some money back.
While this is not very common, some players may agree to such terms to make sure they don't lose the whole pot, and they still have a chance in the game, often when they don't have money to rebuy.
It may be considered slightly unethical to offer such odds, but it’s all business at the poker tables, and you should always take a deal that favors you if the other side doesn't seem to mind.
The big question, of course, is whether or not you should take insurance when the option is presented and whether it adds value.
The answer depends on a number of factors, with the primary one being the kind of deal you are being offered.
If you are in a situation where a player may accept to get less equity than they actually have in a hand, you will actually be gaining equity by accepting insurance.
However, you will often be offered a deal that costs you a bit of equity but lets you realize most of your hand’s value.
In this case, the deal is not worth it from an EV point of view, which means you should consider not taking it and accepting the variance of your situation. Variance in poker can be pretty bad, but while taking insurance will cut the variance down significantly, it will also often make your overall EV worse.
You should consider how big your edge is in a game and perhaps accept insurance offers in soft live games where there is a lot of money to be won while probably refusing it if the edges are small and the game is not one you can easily crush for a massive win rate.
The biggest problem you may face if you want insurance in your poker game is finding someone to give it to you. Most recreational players don’t understand the concept of equity and may not even grasp what it is you offer if you offer it to them.
Pros, on the other hand, may not want to bother with insurance, as it does tend to stall the game and make things move along slower than usual.
If you want to play poker with some insurance, the best thing to do is find a party who will consistently give it to you before you start playing and get insurance from them each time.
This is exactly what pros like Phil Hellmuth have done in TV games in the past, where he would ask for insurance from a player he already knows may want to do such a deal.
In doing this, also make sure you know who you are dealing with and don't let anyone charge you too much of your equity, as that will simply make you lose in the game in the long run.
For a long time, poker insurance was only possible in live games, while online poker operators didn’t offer such an option.
More recently, major online poker platforms like PokerStars and GGPoker introduced some forms of all-in insurance, which can help you reduce variance in all-in situations.
In such spots, online poker sites now offer you a chance to cash out your equity in full, regardless of what the other player wants to do. The operator serves as your insurance party and pays you your equity regardless of the outcome.
However, there is a catch. Each online poker operator offering all-in insurance or cash out will charge you a small fee every time you accept this deal.
You will be paying around 1% of your overall winnings anytime you accept the insurance, and while this may not seem like a lot, it does tend to add up.
Considering the edges in online poker are already quite slight, taking poker insurance in online games is not necessarily the best idea you can have.
Of course, there is nothing wrong with taking insurance once in a while in massive pots where the equity might be running close, but for the most part, running the board and letting the chips fall where they may will get you more value in the long run.
Yet, it is worth knowing which online poker platforms offer all-in insurance, how to use it, and which scenarios might make it worthwhile.
The concept of poker insurance has been around almost as long as the game itself, with many players in love with the idea of having their all-ins insured in full. While there is nothing inherently wrong with getting insurance on your big pots, always remember to get as much of your equity as possible in such scenarios.
Online poker sites now allow for poker insurance but charge a fixed 1% fee anytime you take it.
Make sure to consider this well before accepting insurance in your games, and always know exactly what your equity is and what you are giving up to insure yourself.
The next time you play poker, whether it be live or online, make sure to keep the idea of insurance in mind and think about your all-in spots from an equity perspective in any potential dealings you make at the tables.
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