New Delhi, Dec. 24 -- Mr. Sharma owned an enviable property in a quiet, upscale Bengaluru neighbourhood. Given its prime location and size, the house was snapped up soon after it was listed for sale by a young couple.

Shortly after the transaction, heavy monsoon rains lashed the city. Damp brown patches began spreading rapidly across the walls and ceilings, causing paint to bubble and peel. It soon became clear that the seepage was not new, but a long-standing problem that Mr. Sharma had concealed through cosmetic patch-ups just before the sale. The couple took legal recourse and recovered a sizeable amount in remediation costs from him.

This conduct mirrors how some people behave while buying health insurance.

Despite having underlyin...