Homeowners can install insulation sheathing on exterior walls and roofs. Wall sheathing is durable, provides extra thermal protection and also acts as a moisture barrier.Internal insulation works well, but it has certain weaknesses. Internal insulation, for instance, must be installed around wall studs, joists and rafters, so these areas do not receive any protection from heat loss. Wood is a terrible insulator, and wood that is not covered by inside insulation provides a point where heat can escape the house.Air infiltration occurs when outside air enters the home through cracks or un-insulated areas, and is one of the primary causes of heat loss in homes. Installing sheathing seals hidden wall cracks and provides a layer of thermal resistance between exposed wood and the outside environment. The results are an increase in insulation efficiency and energy savings.Types of Insulated SheathingInsulation sheathing comes in two basic types: polystyrene resins and polyisocyanurate sheets. Polystyrene-based insulation sheathing can react with solvents found in some paint and adhesive products, and so should only be used with products recommended by the wall sheathing manufacturer.Polyisocyanurate insulation sheathing is more resistant to solvents than polystyrene sheathing and tends to have a slightly higher R-value. Both types of insulated sheathing degrade with long-term exposure to the sun's ultraviolet rays.Installing SheathingInsulated sheathing can be installed on the outside of walls and roofs. Siding and other decorative items must be removed when installing sheathing and then replaced afterwards. Because of this, the best time for installing sheathing is when replacing roofing or siding materials.When installing sheathing, only use tools and fasteners recommended by wall sheathing manufacturers. Thin brick and stone veneers can often be installed directly over insulation sheathing, but check with the sheathing manufacturer first.If you're installing sheathing to create a water barrier, it's important to tape panels together at the joints and seal areas where the insulation sheathing meets the flashing of windows, doors and any other wall sections where leaking is a possibility. Need More Help? If you need professional help with your project, LendingTree Home Pros can help. The good news is that LendingTree Home Pros maintains a directory of home service professionals and can match you with a home pro in your area. All the home pros listed in the LendingTree Home Pros directory are properly licensed and insured and are backed by a $10,000 money-back guarantee! Let LendingTree Home Pros help you find a pro today!