To rewire or not to rewire

Question

I got two electricians to come out and look at my 1939 house. I wanted to see if the wiring needed upgrading.

One person opened up a receptacle and said I had cloth insulated wires and that I need to rewire the house...including bringing everything up to code. This includes adding outlets to walls that don't have it. It includes adding hardwired smoke and CO2 detectors. It also includes re-wiring all the light fixtures too. Cost ~14k

Another contractor went up to the attic with me and saw old metal conduits and said that it was actually in good shape. He said that as long as the wires are inside the conduit it would be fine. He also saw that in the house there were some receptacles that are not grounded, have ground and neutral reversed, no neutral or ground... I asked him about cloth wire and he didn't seem to think that was an issue. As long as it is in conduit it was okay. Cost: ~$800 to make sure receptacles are grounded and properly wired.

Who should I listen too?

update

picture of conduit

This is the type of conduit in the attic. It may be BX (armored cable) as mentioned by by @ThreePhaseEel.

Here's a picture in our kitchen. Old junction box and metal conduit. One goes to the floor the other goes to a hardwired garbage disposal.

updated 9/16

The house has 3 bedrooms, one bathroom, a small dining room, a living room and a kitchen (total ~ 1400 sq/ft). Some outlets are actually grounded (at least that's what my tester tells me).

Update 9/21/16

The outside of the wire actually feels a little tacky...almost rubber-like.

Answer 1

If you're going to have old wiring, it's pretty nice to have it in metallic BX. I would wire separate grounds (as NEC 2014 now allows) and make sure every box is grounded, and make sure your BX grommets are tight, conducting and not corroded so the BX is relatively well connected to ground at each end where accessible. At that point you're almost as good as EMT conduit, and that's pretty good for a domicile.

Add GFCI or combo breakers.

OK yeah, so the wiring is old. So what? What's the failure mode here? If you get a wire break, it'll arc inside all-metal containment (which will trip an AFCI if you use it) otherwise it'll arc until it snuffs (dead circuit) or it'll arc until it arcs to the shield, then it'll trip the GFCI. If insulation fails and a hot or neutral contacts shield, it'll trip the GFCI. You're golden.

Answer 2

The old wiring in your house appears to be old-style AC (BX) with cloth insulated wires in a paper overall wrap under the spiral armor (no bonding tape). Its fault current capability in the event of a ground fault is limited -- the armor in this early BX, while grounded, is not up to current standards for an EGC (equipment grounding conductor). I would check the newer wiring to make sure that the EGCs are continuous to the main panel, and fix all the miswired outlets for that matter (i.e. reversed wiring on outlets).

You could replace the ungrounded outlets on the BX circuits with what are known as self-grounding outlets if you wanted some sort of ground connection on them instead of none whatsoever, but I'm not sure that's essential with modern levels of GFCI and AFCI protection.

Answer 3

If it were me, I'd leave it be; as long as everything was done with a reasonable amount of skill originally, it will be fine; if it's been modified a lot through the years, and there's visible issues (connections not in boxes, too many junctions, open wiring), that's another story.

If you want to spend money for peace of mind, spend it on arc fault sensing breakers, fire detection, things like that, and like others said, upgrade as you need if you're making other changes.