How NOT to insulation your foundation
We recently completed a remodeling project where we added a second floor living space over a garage. As part of the project, we also installed a new roof and new siding on the existing house. When the house was originally built, rigid insulation was installed on the outside perimeter of the foundation before backfilling. In theory, this is not a bad idea as it provides additional R-value to an otherwise uninsulated foundation. However, the problem in this application is that the insulation was extended above grade and terminated at the siding and framing of the main structure.
What was obviously not anticipated was that this rigid insulation would provide direct access for termites to the wood sill of the house.
We could actually see the tunnels in the rigid insulation that the termites chewed their way through to get from the ground to the house. The termites had infested the entire perimeter of the house! The had even started to work their way up the framing of one of the corners of the house. 
The challenge to the homeowner in this situation is that this was completely undetectable - it was only discovered once we started removing the existing siding in preparation of the new siding.
If you notice a similar situation in your home, have it checked out ASAP! The sooner a problem like this is discovered the easier and less expensive it is to remedy.