Issues with knob and tube wiring:
One of the most common problems with this kind of wiring is its insulation, which is made of rubber instead of plastic. Over time, the rubber degrades, exposing bare wires to air and moisture, increasing the chance of a short or a fire.
Extra circuits are also a problem because basic knob and tube installations only allowed for 12 circuits in a home. Often, homeowners who needed extra circuits would pay contractors to add new circuits at the panel or simply splice into an existing wire. Both of these modifications run the risk of overloading the system.
Knob and tube wiring also poses a problem for insurance companies. Some demand higher premiums from customers with this kind of wiring in their homes, while other companies refuse to insure homeowners at all until the wiring is changed.