Many insurers require an inspection to show that the coating on the wiring is in good condition. If it is, they may write you a policy. Because older houses often have a lower capacity in their wiring systems, homeowners should make sure they don't have too many electrical gadgets plugged in, such as computers, stereos, and so forth. An electrical overload could easily result in a fire. Knob and tube wiring may continue to be safe to use.
Proper maintenance is the key.
Where wire insulation is brittle or cracked, it should be replaced, according to Mark W. Earley, assistant vice president and chief electrical engineer for the National Fire Protection Association. Earley points out that proper maintenance is important with all electrical system components. State Farm Insurance Co., for example, doesn't look favorably on houses with knob and tube wiring, says Phil Supple, a company spokesperson. Second, State Farm worries about the lack of a ground wire with this style of wiring. Modern wiring systems reduce the chances for creating a fire hazard through the use of a grounding wire.