Insulation soaks up water. There are a number of ways that water gets into the roofs and crawlspaces of homes. Roofs can leak when the roofing materials are compromised. Sometimes, water can get into an attic because of faulty mechanicals, fire, or a natural disaster (i.e., hurricane/tornado). Crawlspaces can flood. Insulation will not dry out in these spaces.
When wet insulation is allowed to remain in an attic or crawlspace, it will attract mold and even pests. This insulation needs to be removed.