This stuff itself is not much of a hazard at all if it is in good condition, was properly installed and has not been abused. The greatest hazard associated with it is because no grounding or bonding conductor was not used with it. If you have wood floors, heavy carpets, etc. then this is not a problem. Where you have two pole outlets in kitchens, bathrooms and laundry it then CAN be a hazard because of the possibility of a person being in contact with grounded surfaces and objects. COMMON SENSE (seemingly rather uncommon now days) should dictate whether, and how much, to replace of knob and tube wiring, not "knee jerk", "hip shot", all inclusive,imperious and arbitrary decisions by insurance companies that this kind of system is unacceptable! Another thought for consideration: Porcelain insulation is far more permanent than any rubber, plastic, or other composition materials. It will continue to insulate with even bare wire, however knob and tube ingress or egress from metal junction boxes can be a problem with bad insulation.
(I have designed high voltage transmission and distributions systems for years using porcelain and glass insulators with bare conductor and this all works extremely well.)