The fiberglass insulation shown in these floor joists is saturated with water and is beginning to fall apart. When there is moisture in the crawl space, the fiberglass will act as a sponge and collect much of this water. However, it was not created to hold moisture, as the water droplets pull apart the fine glass fibers, causing the insulation to sag and fall to the ground. The fiberglass, being torn apart and separated will lose its R-value and will need to be replaced or removed.