AVS Special Member
Join Date: Dec 2008
Location: L.A. - Lower Alabama
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When I pulled permits and started on my space, the first inspection was to verify insulation. I would point out that TMcG replaced his insulation with closed cell foam, unless I'm mistaken. So I don't think the recommendation is to remove the insulation and not replace it with an equivalent product. Closed cell foam is a great option because it takes up less space, provides a vapor barrier when applied at the correct thickness, and does not support mold growth. In my neck of the woods, a vapor barrier is not required, but I would be willing to bet that in your region it is a code requirement.
Your contractor should be installing a waterproofing system on the exterior of your house. There are lots of options for this. I went with a three part system that applied a spray on membrane, then a dimpled mat, and followed that with a drainage board. BTW, my builder ate the costs on the upgrade to this system without me even asking him to. Again, you need a good builder. If I had to guess, I would bet your builder will either go with a spray on membrane and some sort of insulation to protect it during back fill, or possibly just use a dimpled mat. Either will require a french drain at the footing.
However, this brings a question to mind. I seem to remember you having a sump pump in your basement. If your lot has the grade that you say, I'm a little surprised they are putting one in. I would think it would be cheaper to just run the drains to daylight on the back of your property. It's less equipment to fail since it's gravity driven. And let's face it, if gravity fails we're not going to be worried about one flooded basement!