What kind of insulation in thermostat cover?

Hi, Just joined. First post.
I'm a novice, and I just replaced the thermostats and elements in my Bradford White electric water heater. It is installed in a trailer, and accessed from outside by pulling the aluminum siding panel off.
The thermostats and elements have a metal cover over them, and when you remove that, there is a piece of yellow insulation covering the thermostats and elements.
In the process of changing the element in the top, I got the insulation to the bottom soaking wet, so I pulled it out.
The thermostat and element have a plastic cover that goes over them. I put it back over the lower element/thermostat, but had to tape it, since the thermostat was not exactly shaped like the one I replaced; the places for the little tabs on the plastic cover are in the wrong spot.
I am worried about that little plastic cover, which I assume insulates the wiring from the metal cover plate, falling off over time and having the insulation in contact with live wiring, and potential for fire.
Can anyone advise me? I believe the insulation is necessary from what I have researched, in keeping the thermostats working properly in the winter time.
Any help will be greatly appreciated.

Just use a bit of standard fiberglass insulation, as long as it doesn't get wet , should be fine. Some of the newer heaters use a preformed to fit piece of Styrofoam. Cut yourself a piece off the side of a $5 cooler

Thanks very much!