Electrical fires are typically caused by poor wiring, faulty contacts, overloaded circuits or short circuits. Although newer homes have circuit breakers in place to shut down overloaded circuits, they can fail to activate before a fire starts. Therefore, it's important to be safe when installing and designing electrical circuits.
When electricity travels through wire, it creates heat via friction from electrons traveling along the wire. Wire that is designed to carry higher amounts of current is thicker for this reason; it can accommodate more electrons. If there is too much resistance in a wire, it can create enough heat to ignite surrounding material, such as the insulation.
Unsteady or loose electrical contacts pose a similar risk. If there is inadequate space for electrons to flow, they generate excess heat. This is why appliances should be completely plugged in and the wires inspected and tested regularly.
Overloaded circuits or outlets also can cause an electrical fire if failsafes are not present or don't activate in time. Each electrical circuit in a building is designed to carry a set amount of current. Exceeding this by turning on too many appliances at once can lead to overheating sufficient to start a fire before the electricity is shut off.