Do window inserts create condensation problems?

Window inserts will increase the amount of condensation on the inside of the existing window. This is because you are blocking currents of warm air in the room from moving past, and evaporating, the condensation. If you have a lot of humidity (you will know because there will be a lot of condensation on the windows and your towels will take a long time to dry on the rack) then it would be wise to invest in reducing it. Heat pumps control the humidity automatically but if you can’t fit them to your house, a good alternative is a heat-pump hot-water tank. This will dehumidify the air in the basement. Since humid air rises, condensation on windows is often caused by dampness in the basement. And, yes, you are right, all dampness problems get worse as the envelope is tightened up. Passive Houses, especially the early generation ones, often had dampness, mold and rot problems.  Mold often leads to asthma for the occupants of the house.