Before adding insulation to basement walls or a crawlspace, it is essential that you repair any leaks and solve any moisture problems. To be sure all problems have been remedied, wait until it is thoroughly dry before you install the insulation. If you are unsure whether or not you have such a problem, tape a square-foot piece of plastic to the basement wall or floor. Leave it in place for a week. If condensation accumulates under the plastic, you have a problem.
The most common causes of moisture problems in a basement are leaks and cracks in the concrete, and seepage, condensation, and drainage problems around the foundation. That may sound like a lot of work, but a systematic review of each potential trouble spot will save you a great deal of time, trouble, and money later on.
Cracks can be caulked. Seepage can be remedies by painting waterproofing sealant on the interior walls. Install closable vents for the crawl space. Open them in warm weather to air-out the crawl space and close them in winter to prevent heat loss.
In low-ground areas where drainage is a problem, install drain tiles or pipes around the perimeter of the foundation. You may need a sump pump to remove excess water. Be sure the clothes dryer is properly vented.
Insulating basements and crawlspaces sometimes requires for a different type of insulation than that which used for attics and walls of a home. Basements and crawlspaces are susceptible to moisture seepage, which can lead to problems like wet or damp surfaces, stained finishes, and mildew.
Water vapor moves easily through most construction materials, including brick and concrete block. A basement wall that is not adequately insulated with a moisture-resistant material will conduct warm moist air from the living space to the cooler outer wall where it is likely to condense.
If you are not heating the basement or crawl space, insulate underneath the first floor. Install fiberglass insulation between the joists with the vapor barrier up toward the heated area. If the basement will be heated, then you need to insulate the basement walls. Use either closed-cell rigid foam panel or the reflective layered insulation.
Rigid foam panels can be used to insulate both interior and exterior walls. Closed-cell insulation is less susceptible to moisture as are other types of insulation. Use only closed-cell insulation for below-grade applications. It comes in 2x8-inch sheets. It should be covered with a fire-resistant material, such as drywall.
For more information on caulking and sealing, see the section on Weatherization. Weatherization goes hand-in-hand with insulation. Many of the solutions overlap.