For the record, I have the exhaust in my side-sills wrapped in Cer-Wool ceramic fabric insulation (Roe does or used to sell this - I sourced it on my own). It is held on by twisted stainless wire. First, I never drive in the rain so no external moisture entrapment issues for me (given the heat of the exhaust I am not sure how water could stay in there whent he car is running anyway - it would boil away). The insulation makes a slight but noticeable difference in that the sills are cooler on your first drive - however - it is "insulation" after all so it works both ways, meaning once you stop the insulation keeps the heat of the exhaust around for a lot longer. Picture this. If you are going to go on a drive, stop nowhere, then come home it helps. But if you are going to run some errands and make multiple stops, it hurts a little.