Final answer:
Non-IC rated recessed electrical fixtures require at least 3 inches of clearance from insulation to prevent thermal hazards. The plastic insulation on wires is to protect against both shock and thermal hazards.
Step-by-step explanation:
The minimum clearance for a recessed electrical fixture that is not rated for contact with insulation usually depends on the specific instructions from the manufacturer or the local building codes. However, it is a common practice to maintain at least 3 inches of space around a non-IC (insulation contact) rated fixture as a safety measure to prevent thermal hazards. The plastic insulation on live or hot wires is designed to prevent both shock and thermal hazards by providing a non-conductive barrier that protects against electrical shock and resists heat that may be generated by the electrical current.