In this study, the focus was placed on the formulation and development of polyester–filler composite as an insulating material using waste rubber particles as filler. The composites were prepared using different rubber concentrations (0–40vol.%). The composites were characterized by testing the thermal conductivity, water retention, density, thermal stability and microstructure (SEM). The results revealed that the rubber particles proved to be a good filler that can be used with unsaturated polyester to produce insulating composite. The experimental investigation showed that the addition of rubber particles to the polymer matrix reduces both the thermal conductivity and the density of composites. The low value of thermal conductivity (0.144–0.113W/mK) and very low water retention (<2.0%) of rubber–polyester composite show promise for constructive applications as a thermal insulator. The SEM micrographs indicated that the rubber particles are well embedded in the polymer matrix with the formation of small voids or gaps within the composite matrix. Increasing the rubber content and size leads to decrease the thermal conductivity and density and at the same time to increase the water retention. On the other hand, the composites showed a slight decrease in thermal stability when compared with neat polymer.