Loose connections is most likely reason the wiring insulation melted. As long as the gage of the wire is rated for the amperage draw, there should be no issue of overheating, if the connections are clean and tight.
Mike, RVIA & RVSA Certified Master RV Technician
Amy, Dr. Assistant - Roxie & Mei Ling, four legs each
2000 Gulf Stream Scenic Cruiser 450 hp & 1330# torque
06 Saturn Vue, 06 Chevy Z71 4x4 & 2014 Corvette Z51 M7