"Understanding Your Home" by Building Inspector Mark Visser
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It is important to insulate the knee-wall as well as the horizontal floor area behind the wall because this is part of the ceilings of the rooms below.
It is equally important to provide adequate ventilation for each attic section behind the knee-wall.
For more information about roof ventilation click here.

Insulation for 1 1/2 and 2 1/2 Storey Homes
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Thermal resistance of insulation

The thermal resistance (or RSI) value is a measure of a material's ability to resists heat flow. The higher the R value, the better the material insulates.

The attic floor behind the knee-wall and the wall itself should be properly insulated. In some houses the floor boards extend beyond the knee-wall.
You can insulate the floor by removing the floor boards.
Some of the boards will have to be re-installed to maintain the stiffness of the floor and the ceiling below.
If the area is not needed for storage it may be more practical to place the insulation batts directly on top of the floor boards.

Important: Prevent heat loss between the floor joists by filling the space directly underneath the knee-wall with ridged board insulation.

Seal the joints around the ridged board insulation with caulking (as Illustrated).

WARNING. All styrofoam (or ridged board) insulation is a fire hazard if not properly protected by non-combustible material such as drywall.

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