What Is Insurance In Poker?

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Last Updated: December 19, 2023

What Is Insurance In Poker

In poker, the term “insurance” refers to a side bet that a player can make to protect themselves against losing the entire pot in a given hand.

In short, you pay a premium when you are ahead to protect yourself from losing a pot. If you win the pot where you took insurance, you must pay the agreed fee from your winnings. However, if you lose the pot, the person who ensured you would pay you based on agreed terms.

This feature is usually only available in games such as Texas Hold’em, Pot Limit Omaha, and Short Deck Hold’em.

While insurance can be a useful tool in some situations, you should know that from a mathematical standpoint, you should avoid taking insurance since it decreases the overall EV of the hand.

With this said, the decision to take insurance can also be based on various factors, including the strength of your hand and the size of the pot. If you are in a huge pot that would significantly reduce your bankroll if you lose, it can make perfect sense to take insurance on it to reduce the variance. You can also run it twice if reducing the variance is your main goal.

Poker Insurance Example:

Let’s say you are taking a shot at higher stakes than you usually play and try your luck at the Texas Holdem cash game with $5/$10 blinds.

Sitting in the Under The Gun position, you get pocket rockets and decide to raise to $30. Everyone folds to the Big Blind, who 3-bets to $100, then you decide to 4-bet, and BB jams putting you all in. Since you are holding the best possible hand, you make the call and see that your opponent has KK.

While you are a huge favorite, this is a situation where it makes sense to take insurance and pay a small premium to protect the massive pot that is outside of your usual stakes. This way, you will reduce the variance and get paid even if you lose the pot, so you could keep playing at the higher stakes.

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