It's a good rule of thumb to use passive Insight or hidden rolls for this situation. If a player does want to roll an active check, you should be careful what information you provide. Even a good Insight check doesn't necessarily mean a character has caught someone out in a lie, only that they have some reason to suspect an NPC might be lying. I also agree that you shouldn't allow repeated checks without any change in the circumstances.
It's fair to say that you can't be expected to lie as well as your most duplicitous NPCs. But you should make an effort. It generally helps to be prepared (not running this type of encounter off-the-cuff) and to have your own story straight. Also, the clearer the NPC's motivation for lying, and easier it will be for you to think of ways for them to paper over any suspicions the characters or their players might have.
Ultimately, if the characters have no reason to be suspicious of an NPC, but the players can't shake their own suspicions, you should not punish them for that. You should allow them to act on those suspicions if they want. There isn't even anything inconsistent about this, roleplaying-wise. We have all had hunches we don't have a shred of proof to support. It's not unrealistic that a character might also have their own "gut feelings," and there's no reason those have to be based on Insight or any other ability check.
If they do react in character, just make sure the results make sense. Consider that a character who takes drastic action to deal with an NPC they think is lying could lead to serious consequences, especially if other NPCs believe the liar is telling the truth.
The exercise of attempting to separate character and player knowledge, in this case suspicions about a lying NPC, is generally a futile one. It's true you might find some players who are willing to "play the fool," so to speak, and that's fine. Let them! But you can't expect everyone to react this way.
There's a large number of players you'll encounter who won't let go of something like this once they know it, and you can't expect them to either. It's very hard to un-know something. Another very important reason for this is that failing to out a lying NPC can lead to a bad result for the PCs; most people are protective of their characters. If you try to make a player un-know something and forget about an NPC that seems to be suspicious, you might just make an awkward situation even more cumbersome. Or some players might even become hostile, especially if they think you're forcing them to do what you want.
I find a lot of the DMs who insist on separating player and character knowledge are rather inconsistent in applying those rules. For example, how many DMs out there would prevent a player from answering a riddle or solving a puzzle when their character wasn't smart enough to know the answer? Almost none. But this is what you'd have to do if you really wanted to be consistent about making players adhere to their character's ability checks and ability scores.
Players and characters are not entirely separate entities, and they never will be. D&D is also not a game about acting. Not all players want to be roleplay as the dupe, and when you force them to do so, you're hampering their enjoyment of the game.
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It's a good rule of thumb to use passive Insight or hidden rolls for this situation. If a player does want to roll an active check, you should be careful what information you provide. Even a good Insight check doesn't necessarily mean a character has caught someone out in a lie, only that they have some reason to suspect an NPC might be lying. I also agree that you shouldn't allow repeated checks without any change in the circumstances.
It's fair to say that you can't be expected to lie as well as your most duplicitous NPCs. But you should make an effort. It generally helps to be prepared (not running this type of encounter off-the-cuff) and to have your own story straight. Also, the clearer the NPC's motivation for lying, and easier it will be for you to think of ways for them to paper over any suspicions the characters or their players might have.
Ultimately, if the characters have no reason to be suspicious of an NPC, but the players can't shake their own suspicions, you should not punish them for that. You should allow them to act on those suspicions if they want. There isn't even anything inconsistent about this, roleplaying-wise. We have all had hunches we don't have a shred of proof to support. It's not unrealistic that a character might also have their own "gut feelings," and there's no reason those have to be based on Insight or any other ability check.
If they do react in character, just make sure the results make sense. Consider that a character who takes drastic action to deal with an NPC they think is lying could lead to serious consequences, especially if other NPCs believe the liar is telling the truth.
The exercise of attempting to separate character and player knowledge, in this case suspicions about a lying NPC, is generally a futile one. It's true you might find some players who are willing to "play the fool," so to speak, and that's fine. Let them! But you can't expect everyone to react this way.
There's a large number of players you'll encounter who won't let go of something like this once they know it, and you can't expect them to either. It's very hard to un-know something. Another very important reason for this is that failing to out a lying NPC can lead to a bad result for the PCs; most people are protective of their characters. If you try to make a player un-know something and forget about an NPC that seems to be suspicious, you might just make an awkward situation even more cumbersome. Or some players might even become hostile, especially if they think you're forcing them to do what you want.
I find a lot of the DMs who insist on separating player and character knowledge are rather inconsistent in applying those rules. For example, how many DMs out there would prevent a player from answering a riddle or solving a puzzle when their character wasn't smart enough to know the answer? Almost none. But this is what you'd have to do if you really wanted to be consistent about making players adhere to their character's ability checks and ability scores.
Players and characters are not entirely separate entities, and they never will be. D&D is also not a game about acting. Not all players want to be roleplay as the dupe, and when you force them to do so, you're hampering their enjoyment of the game.