How Does Insurance Work in Poker GemdiscoPH Bonus As Opposed to Blackjack
You may have heard of blackjack insurance before. This option, which is offered when the dealer is showing either an ace or 10, allows you to insure against a croupier’s natural blackjack.
Blackjack is seemingly the only casino game that features insurance. After all, it’s the lone game that gets any publicity for this rule.
However, you may be surprised to know that poker also features insurance. Furthermore, poker insurance is now being offered in the online game.
If you’re interested in finding out more about how poker insurance works, you can keep reading. I’ll cover more on this concept along with whether you should consider using it.
Guarantee Winnings With All-In Hands
If you’ve played poker online for any measurable amount of time, you’re going to suffer a bad beat. Your good hands produce nothing in these cases just because of bad luck.
Insurance is a way to guarantee that you get something out of a strong poker hand. This option is available during an all-in hand.
Unfortunately, the vast majority of cash games and poker tournaments don’t give you an opportunity to make this choice. Instead, it’s only available in certain circumstances.
But you can always propose insurance if you’re in a private cash game. You do need to know how it works before doing so.
The basic concept is that you can insure an all-in hand for your given equity.
Here’s an Example:
- You and another player are all in pre-flop. The pot is worth $100.
- You’re a 70% favorite (70% equity) to win a hand. You ask for insurance.
- If you win the pot, you take $70 and pay the other player $30 for their equity.
- If you lose, the other player collects $30 and pays you $70 in insurance.
You receive the same amount regardless of whether you win or lose. The only difference is if you receive $70 from the pot or through insurance.
Insurance doesn’t change your odds of winning. All it does is ensure that you’re paid an amount equal to your long-term expected value (EV).
Of course, insurance deals don’t have to involve perfect equity. As the favorite, you may ask for more money.
- You and an opponent are all in pre-flop. The pot is worth $100.
- You’re an 80% favorite to win the hand. You want insurance.
- However, you also want 85% of the pot. The other player accepts this deal.
- If you win, you’ll receive $85 and pay the opponent $15.
- If you lose, the other player collects $15 and pays you $85.
The idea here is that you’re more likely to win the hand anyway. So, the other player may agree to a lesser deal just to get something from the pot even if there’s a negative expectation (-EV) for them in the long run.
Insurance Goes Mainstream Through TV Poker
Insurance is far from a new concept. In fact, it was first popularized during an episode of Poker After Dark.
Phil Hellmuth and David Williams were both all in. Hellmuth had the advantage with pocket kings, while Williams was the dog with A-K.
What proceeded was a complicated scene, where other players jumped in on Hellmuth’s insurance proposal. Williams, who didn’t participate, got annoyed that the game was being held up.
This example doesn’t coincide with typical insurance scenarios. But it shows how players sometimes engage in this practice to get guaranteed chips from a strong hand.
Entering the Online Poker World
For years, some have wondered why online poker sites don’t implement insurance. After all, these sites have the software to easily do the calculations for this option.
PokerStars is taking the initiative here. The world’s largest poker site is now offering All-in Cash Out, which is essentially insurance.
The unique thing about All-in Cash Out is that it’s not a deal between two or more players. Instead, it’s an arrangement between the player and house, just like with blackjack.
If somebody requests this option, then PokerStars acts as the insurer. They charge 1% of the player’s equity for providing this service.
Assuming the other player doesn’t also choose All-in Cash Out, then they’ll be paid based on how the hand plays out.
Example of This Scenario:
- You and another player are all in. The pot contains $200.
- You have 75% equity in the hand. You select All-in Cash Out to protect yourself.
- 200 x 0.75 = $150
- 150 – (150 x 0.01) = $148.50
- You receive $148.50.
- Your opponent doesn’t choose All-in Cash Out. They can still win the $200 pot.
- But they lose the hand. PokerStars collects $200 + $1.50 insurance fee.
How Far Will Poker Insurance Go?
In being the online industry’s largest operator, PokerStars has always been an innovator. That said, it’s no surprise they’ve taken the reins by offering insurance before their competitors.
The big question is if other internet poker rooms will follow suit. After all, All-in Cash Out could prove to be a popular option.
I believe that, yes, other online poker sites will eventually adopt poker insurance. It’s a cool concept that should spark interest among players.
I’m actually hoping that other sites do roll out insurance for a couple of reasons. First off, PokerStars isn’t available to many unregulated markets (e.g. most American states).
Second, 1% in equity feels like a fairly high fee. Assuming some competitors also adopt insurance, they might take a smaller amount, such as 0.5%. If the latter happens, PokerStars might lower how much they take for providing poker insurance.
The internet poker industry could expand on this idea by also giving players an option to take insurance between themselves. Such a choice would allow gamblers to enjoy poker insurance without having to pay fees to the house.
Is Insurance a Good Deal?
The key advantage of poker insurance is that it reduces variance. You don’t have to worry about suffering a bad beat if your hand is insured.
Meanwhile, an opponent with a lesser hand can guarantee themselves winnings from the pot. They’ll especially welcome this idea if a smaller payout guarantees them a profit when accounting for blinds and other players’ bets.
The only downside is that the house receives a cut of the action. In PokerStars’ case, they collect 1% of any taker’s equity.
This amount may sound small in the short run. But it adds up for anybody who logs major volume.
Most serious players won’t be thrilled with giving up 1% of their EV to a poker site. Those who play thousands of hands every day aren’t as affected by bad beats and would rather maximize their EV.
Therefore, All-in Cash Out mostly seems like a good deal for recreational players. This crowd fears losing big hands as the favorite and is more likely to accept guaranteed money.
Poker insurance isn’t a new concept. However, it could definitely grow now that it’s available in the online game.
PokerStars has become the first site to feature insurance. Their All-in Cash Out option is a deal between the player and house, whereby the latter takes 1% equity for insuring hands.
This situation works a little differently than insurance in private cash games. In home games, players work out a deal between themselves.
The 1% fee could rub many grinders the wrong way. Successful players who aren’t as worried about bad beats will likely ignore All-in Cash Out, rather than surrender 1% of their equity.
One hope is that more online poker sites adopt this feature. More competition might lower fees for poker insurance as a whole.
At the moment, though, it’s just nice to see that poker insurance is available. Some forum users have pondered why this option hasn’t been available in online poker sooner.
The key is that it’s available now. Many players will appreciate being able to guarantee winnings in the event that they do suffer a bad beat with good cards.