A well-insulated house is a bit like dressing for the weather. A wool sweater will keep you warm if the wind is not blowing and it is not raining. On a windy, rainy day, wearing a nylon shell over your wool sweater helps keep you reasonably dry and warm. A house is similar. On the outside, underneath the brick or siding, there is an air barrier that does the same thing as the nylon — it keeps the wind from blowing through. Then there is the insulation (like your sweater) and a vapor barrier, which helps keep moisture away from the house structure where it can do damage.
Insulation is rated based on a measurement of resistance the material has to the movement of heat. This is most commonly referred to as an R-value. The higher the R-value the more effective the insulation is. Local building codes list recommended R-values for each area of your house (these R-values are required for new construction). Improper installation of insulation can lower the R-value of the material you are using so it’s a good idea to follow the manufacturer’s instructions or hire a professional to do the installation.