AS an AHJ, and an EC, K&T that has NOT been 'modified' usually does not present a problem
The OCP that protects the K&T circuits should be checked as to proper amperage firstoff.
Yes, K&T is 'in' walls, but there is no need to open the walls, unless you are determined to remove the K&T.
"Fishing-in" as Dnk said is the way to go!
As to the lighting outlets (ceiling), what I have seen in 25 years+ is insulation deterioration from heat from the bulbs. Old fixtures lacked any insulation in the canopy, and people installed all kinds of bulbs over the years.
Peace of mind will require installing new wiring; it is the way to go if you are thinking about any renovation projects. A good lic. EC will 'fish' new lines, with little or no plaster damage. Remember, you get what you pay for!!
There is nothing within the scope of the NEC that mandates removal of K&T wiring.
AS to the insurance thing, that answer is best left to a qualified licensed insurance professional.
John
