Damaged or Worn Insulation

Without completely intact insulation, electrical wiring is extremely dangerous. Frayed, cut or burned insulation on any wire is a serious hazard. Also, cable splices should always occur inside an approved junction box.

Funny Wiring

This is no joke, of course. Stories of DIYers using extension cords for circuit wiring are not apocrypha. It happens, and it’s the equivalent of using a garden hose for water-supply pipes. If you find inappropriate wiring anywhere in your house, assume the worst; it’s time for a complete inspection.

Inspection is the Best Defense

The U. S. Consumer Product Safety Commission recommends an electrical inspection of your home every 10 to 40 years, if you’ve added substantial new loads (such as high-wattage appliances) or if you detect any warning signs of wiring problems. Inspections should be conducted by certified electrician or electrical inspector.

Source: http://www.networx.com/article/dangeous-wires-warnign-signs