Insight isn't a lie detector, and neither is sense motive in older editions.
When an npc lies, you generally can't tell, unless the DM decides that the npc exhibits a remarkable behavior. And if that be the case, a player can ask wether they can tell what this behavior means... and then (possibly) you roll insight against the npc's deception to determine what it means, but not wether the npc lies. The players may be able to deduce some things that give them a clue regarding whether the npc is telling the truth, but it is still up to them to interpret it how they wish.
For example, an npc might be throwing a suspicious look at someone else at the bar. Determining what that means would require an insight check.
Or, an npc may be making a secret gesture at another npc, again, roll insight.
Or, an npc may be acting a bit skittish or nervous. Determining why he is acting this way, if this can be determined by just looking at him, may require an insight check.
Or, an npc may be bluffing, and the players may ask to check this with an insight check... but maybe it is impossible to determine, that is up to the DM.
Generally speaking, when I have an npc lie to my players, he does so in a way that is not obvious to them at all by any means... unless he is really bad at it, and I want him to get caught.
Example of insight from play:
DM: While talking to the barmaiden, you notice one of your companions is looking a bit agitated.
Player: Can I tell why she is behaving this way?
DM: Roll insight.
Player: 15!
DM: She seems to be a bit jealous, and about to pick a fight with the bar maiden.
Player: I do not intervene and just enjoy the show.
Example of lying from play:
Npc: One word and I will rain hell down on you and your friends. You are on my turf now, and me and my pals have you vastly outnumbered, surrounded and are better armed. You would do well to lay down your weapons, if you value your lives.
Player: Can I tell if he is telling the truth?
DM: He seems to mean what he says. What are you looking for specifically?
Player: Can I tell if other people in the tavern are on his side?
DM: Make an insight check.
Player: 15!
DM: You notice everyone in the bar is watching you and your friends carefully, and a few shady characters in the tavern seem to have their hands on a weapon tucked underneath their cloak. It seems he is not alone, but whether your party is also outnumbered, you do not know.