I do believe that if electrical work is done without a permit/being
inspected, and this electrical work causes a fire or whatever, your
insurance company might not pay for damages.

Also electrical permits are not expensive and people doing electrical work
make mistakes sometimes because they are human, so it is a good idea to get
an expert (inspector) to look at your work to be sure it is safe.

FYI - I first upgraded my service and ran just a few new critical circuits.
While inspector was checking my work, I warned him to not touch any old
electrical boxes because of the dangerous D-I-Y wiring I had found. He said
he had seen worse, but thanked me for the warning.

And he saw my new work and saw that I knew what I was doing. Understood that
I was fixing things a little at a time, etc. And he saw that I eventually
was going to fix all the dangerous stuff (which I later got separate permits
for).

So I think they understand it is difficult to fix everything at once while
living in a house.