A Look at House Rules: Insurance
The whole world is aware of the definition of insurance and the majority of us carry it on our homes, businesses, automobiles, and life and health policies. The bottom line is you pay someone to guarantee that if a disaster hits, you are compensated and can survive the financial tidal wave that could ensue and wipe out every penny you’ve earned — or worse yet, could hope to earn.
Poker isn’t really any different when it comes to financial disasters. In fact, you should be sure to check and reaffirm your bankroll management skills to avoid such “risk of ruin,” as Matthew Pitt advised this week in “An Introduction to Bankroll Management.” Practicing smart bankroll management can help “insure” you against just a fate, but there’s another meaning of the term “insurance” in the context of poker, too.
The subject of today’s “Look at House Rules” is a bit off the normal walk through our discussions of particular house rules. Rules regarding “insurance” aren’t typically included, but may be referenced in the rulebook of your favorite poker room.
What Is “insurance” in poker?
Although there are several forms of insurance available in poker, they all represent a kind of mid-hand deal that affects how the final pot will be rewarded.
A typical example might find you putting up an initial sum to guarantee a favorable outcome if your favorite donkey busts off your big hand even after you’ve put every raise allowed in the pot trying to telegraph the fact that you do, indeed, have a better hand. You’ve made it clear your opponent would be insane to try to draw out on you, but your opponent continues to bludgeon his or her chip stack with the worst hand... and then suddenly, your opponent has the best hand and wins.
In this scenario, insurance could come up before the final card is dealt as a deal between you and your opponent that would lessen your loss in the hand should you lose, but also lessen your gain should you win.
How does insurance work in a cash game?
When a player — or multiple players — go all-in, the all-in players can stop the deal and ask the other players at the table for insurance. This can only happen when everyone is all in and there is no further action; if there are still players in action in the hand, it's not possible. If someone accepts the request, the players turn their hands face up on the table and insurance is calculated according to the number of outs the all-in player(s) have in the hand.
If the all-in player(s) lose(s) the hand, the insurer will give the player(s) back a portion of the pot which is an agreed upon percentage of their equity in the pot. However, if an all-in player wins, that player will pay the insurer the agreed upon amount of his or her equity in the pot.
How does insurance work in a tournament?
Insurance deals are not available during tournament play, at least with regard to players taking insurance during a particular hand. The idea may still apply, though, in situations such as when a player has already prearranged an equity deal with another player or company. That type of deal would most assuredly involve the cost of the buy-in and the position a player busts out in.
How does insurance come into play in house rules?
It doesn’t. Insurance is a private agreement between the players and the poker room doesn’t guarantee the negotiation of insurance or compliance with any private agreements made at, or away from, the table. Almost all poker rooms allow insurance deals, though, and true to form, you’ll find the majority of them are made in high-stakes games, not in low-stakes.
Although many home game players may not appreciate the use of insurance, there are some who may make it a part of their weekly cash games and tournaments. You could play the role of the insurer or the player being insured and use the option as a way to help build your bankroll.
Be sure to think over your options before taking either role since you are typically offsetting risk and you don't want to take the worst of it when you make an insurance deal.
It's very possible to arrange insurance deals with your friends and poker playing buddies when you play online poker. In order to do this, you would have to set up a prearranged choice of hands that you would insure or wanted to insure, and choose the online poker sites that you could import your hand history from using a “hand replayer” such as can be found at sites like Poker Hand Replays. Importing the hand history from your favorite online poker site is verification of the entire hand to uphold your winning story or your worst bad beat.