What should I do about wet insulation in my attic and walls?
If your insurance adjuster is fair, He/she will cover the costs of removing all damaged materials and replace them.  In fact, water soaked insulation and drywall cannot be dried out and salvaged.  This will be a mold factory soon. The sooner you remove this stuff and expose the framing, the lesser the chance of growing mold on the framing.  If the framing is already showing mold, it will have to be remediated and treated before proceeding. This should be done professionally. It is not an easy DIY project and if not done properly will cause more problems in the future.