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How should full basements, the most common type of foundation in New England, be insulated? There are many approaches that work fine in particular situations, of course, but for most applications, I believe the methods covered here will result in the best performance with the least worry. 1. Assume the basement will be heated. Insulate the foundation even if your clients don't expect to heat it. Otherwise, if they later decide to turn the basement into a living or working space, dealing with retrofit insulation will be difficult, expensive and probably not entirely satisfactory. In addition, an insulated, tight foundation means greater comfort upstairs with fewer drafts, as well as better drainage and a reduced risk of frost heaves.