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Finally, there seems to be a growing concern about this old wiring from the homeowners insurance companies.
I have found one that will not write a policy if there is more than a certain percentage of knob and tube wiring still in use and several will not offer coverage unless it is all replaced.
Knob and tube wiring is the original wiring method used from the late 1800's until approximately 1947.In 1987, the National Electric Code prohibited the placement of insulation in contact with this type wiring.Later, a couple of west coast states permitted insulation provided the wiring was "certified" by a licensed electrician, foil or paper backed batt insulation was not used and warning signs were placed where the old wiring is concealed by the insulation.The wire suspended in open air allows heat to dissipate.
Loose and rolled insulation counteracts the original open air installation of knob and tube wiring.
Heat and critters Heat directly above ceiling lights and in un-vented attics can also degrade the wire insulation.