Applications of LEDs have increased significantly, and increasing outdoor applications are observed. Some outdoor applications require high reliability as their failure can lead to hazardous consequences. Examples are their applications in automotive, street lamp lighting etc. To ensure the reliability of LEDs in outdoor applications, reliability test that include humidity on the LEDs must be done. However, it is found that accelerated life test of LEDs at high humidity level cannot be extrapolated to standard condition of lower humidity as the mechanism of degradation depends critically on humidity level. In fact, the degradation of LEDs in outdoor applications is mainly due to the degradation of their encapsulation and housing materials (or called packaging material as a whole) instead of the semiconductor chip itself. The decrease in lumen is the results of crack and discoloration of the LED packaging material. Detail understanding of the failure physics of the packaging material for LED under humidity is needed for extrapolation performed at accelerated stress condition so that LED luminary reliability can be predicted. This chapter reviews the different types of degradation physics of the packaging material using ab-initio simulation with excellent verification from experiments. The method of extrapolation is therefore derived from the physics-based model after detailed understanding of the degradation physics of LEDs. The model also provides strategy for industry to prolong the usage of LEDs in outdoor applications, either through materials or operating conditions selection.