Two acronyms come up in almost every inspection report: GFCI and AFCI. They protect against two different dangers, and modern code requires both in much of the home.
GFCI: protection from shock
A ground-fault circuit interrupter compares the current going out with the current coming back. If even a tiny amount is leaking, possibly through a person, it shuts off in a fraction of a second. You'll recognize GFCI outlets by their test and reset buttons.
Current code requires GFCI protection in bathrooms, kitchens, laundry areas, garages, basements, crawl spaces, outdoors and near sinks. One device can protect the outlets downstream of it, or a GFCI breaker can protect the whole circuit. See GFCI outlet installation.
AFCI: protection from fire
An arc-fault circuit interrupter listens for the electrical signature of arcing from a damaged cord, a loose connection or a nail through a cable. Arcing produces heat that standard breakers don't detect. AFCI protection is required for most living areas in new work, usually at the breaker.
Do older homes have to be upgraded?
Existing wiring is generally allowed to remain as it was installed, but new work, remodels and replacement outlets in covered locations must meet current rules. In practice, a kitchen or bathroom remodel or an electrical panel upgrade is when protection gets brought up to date.
Testing
Press the test button monthly. The device should click off and the reset should restore power. A GFCI that won't trip, or won't reset, needs replacing.
Nuisance trips
Frequent GFCI trips usually mean moisture or a deteriorating appliance. Frequent AFCI trips often point to a real wiring fault. Either is a job for electrical troubleshooting, not for swapping in a standard breaker.
A quick upgrade list for older homes
GFCI protection at every wet location, AFCI breakers where the panel supports them, grounded or GFCI-protected replacements for two-prong outlets, and working smoke alarms. An electrical inspection will map exactly what's missing.