Insulation and Wiring – Rule #62 of home inspection: If a rodent *can* gnaw on a thing, it *will* gnaw on that thing.
All rodents, including mice and rats, have four front teeth that never stop growing and must be worn down to keep them at a manageable size. If necessary, they’ll simply grind their teeth together to keep them at a manageable length, but they much prefer to gnaw on other things like wood, plastic, and the sheathing and insulation on electrical wiring. In some cases, when desperate, they actually eat the insulation. That wasn’t the case here, as the chewed-up insulation remains in a pile below the cable.