I've seen this claim a lot, but what is the actual legal basis for it? Contractual language in specific policies? Assorted state laws? Homeowners insurance generally covers negligence by the owner (otherwise you'd be out of luck for many types of events). A homeowner modifying wiring in a way that causes a problem would seem to fall squarely into this category.

Legal basis? Ask a lawyer, but I suspect it's buried in contract law.

Homeowners insurance generally covers negligence by the owner

Does it?

I just know several people who have done their own 'renovations' that have had insurance claims turned down (even after arbitration) because they didn't have a licenses contractor do the work. People who insisted they knew better than anyone else. Typical.

So rewire at your own risk, I guess.

Especially now that it's publicly available on the internet. And yes, the fire investigators for home insurance DO check things like that.