Insulation should never be damp. Water causes wood rot, destroys drywall and promotes mould growth. Damp insulation is a symptom of a problem that should be identified and corrected immediately by finding the water's source and stopping it, disposing of all damp insulation and replacing it with new insulation. Finding the source of the moisture is the most time-consuming step. Correcting the problem is usually a minor do-it-yourself repair. Always thoroughly dry and disinfect the area to prevent mould growth before installing new insulation.
Pipes run through walls and across the ceiling. They occasionally spring leaks because of faulty connections or damage during installation. Large leaks or outright breaks are easily identified because they release so much water that the spilling water is audible and creates large water spots. Smaller leaks, often no bigger than a pinprick, spray or drip water that gradually seeps into insulation. Check the pipes for leaks early in the troubleshooting process. Call a plumber to repair large breaks.
Water from a leaking roof often travels along the rafters and down into the wall cavity or drips and migrates along the ceiling. Check for dampness near the top of the wall to determine if moisture is coming from above. Go into the attic and look for water stains on the roof decking, along the rafters and on the attic floor and insulation. Repair the roof leak and follow any stain to its end.
The drain line from an air handler in the attic sometimes leaks because it gets clogged or damaged. The water then flows across the attic floor and into the wall cavity. Inspect around the top of the wall for dampness. Check around the air handler for condensation or leaks in the drain line. Clean or replace the drain line if it is clogged or damaged.
Concrete absorbs and transfers moisture to the sole plate (bottom horizontal framing member) and up into the insulation. Check for dampness near floor level in buildings with concrete slabs. Waterproof the foundation to prevent moisture transfer, and grade to direct water away from the foundation.