Why, you might reasonably ask, would any owner put in a new electrical system? The answer is that the old one broke or is inadequate. In newer homes, this is almost never a problem. However, it can be a concern in older homes, particularly those more than 50 years old. Because of the growth of electrical appliances and the power they consume it can be a problem in homes built at little as 30 years ago.
With electrical systems, two things usually happen over the years. Either the wiring insulation simply rots out and needs to be replaced. Typically, it only rots in a few places, but because those places are hard to identify, a whole new system might be in order. Or it was originally wired inadequately or it has simply become outdated.
The rot can be caused by a normal failure of the old insulation or by the wire over-heating do to carrying a higher load than it was designed to carry.
Examples of inadequate wiring include the lack of a grounding wire, an undersized service entrance, overloaded circuits, or missing GFIC outlets.
A ground wire is the safety feature of an electrical system. It allows the current to run back to a safe ground, rather than through your body in an emergency. A ground wire was first required by the NEC code in 1947 for laundry rooms. In 1956 that was extended to include basements, garages, outdoors and other areas where a person might be in contact with the ground. Ground wires have been required on all 120 volt residential branch circuits in the US since 1962. [1]
A GFI circuit (AKA GFIC) measures the current between the circuit and the neutral wire and when an imbalance occurs (indicating there is a fault or you are getting a shock), it almost instantly closes down the circuit. It's one of those marvelous safety inventions that have been around for a few decades, but not long enough to be in many older homes. All of which is to say that if your home doesn't have a ground wire or GFI circuits as part of its wiring, safety probably indicates that it is time for an upgrade.
Contrary to a popular misconception, a ground wire is not required for the proper operation of a GFI device. GFI devices function just fine as designed without the ground wire. In fact replacing an old 2 prong, no ground duplex receptacle with a 3 prong GFI is the only time you are allowed to use a 3 prong outlet on a two wire circuit according to the code. For full compliance with NEC, the device should also be labeled "no equipment ground present".
What Are Your Options?
As with any home system, your options are to repair or to fix. With electrical, however, if the problem is that the insulation on wiring is old and falling apart, or a proper ground wire was never installed, your only real solution is to rewire.
In some cases, it might be possible to rewire only wet or high load areas (bathrooms, kitchen, utility, garage, and so on). You should check with your local building department to see what their policy is regarding older houses that are improperly wired or have out-dated wiring.
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[1] Source: Underwriters Laboratories Inc.
www.nfpa.org/assets/files//PDF/Proceedings/Dini_paper_-_History_Residential_Wiring.pdf
