Will Mold Grow on Wet Insulation? 

Potentially. However, a larger concern is how wet insulation can lead to mold growth in your crawl space. When water drips from your wet insulation, it creates the perfect setting for mold to spread. Mold feeds on decaying organic matter such as wet and rotting wooden beams in your crawl space. Over time, mold releases its spores into the air, and these can travel into your house. Spores may cause health issues or aggravated allergies. They will also cause mold to grow in other places around your home such as closets or near pipes.