Wet insulation is inefficient — but more immediately, it can be a hidden risk. When a roof leak leads to saturated insulation, that insulation almost always needs to be replaced. Wet Insulation Is Bad for Your Roof, Your Building, and its Occupants. Insulation sits just below the roof’s membrane. When a leak allows water to seep in through the outer membrane and saturate the insulation below, that moisture can deteriorate the roof on multiple fronts.