Ask any professional, myself included; they will recommend that your stainless steel chimney liner is insulated. When you are deciding to reline your chimney, your insurance company will more than likely require the pipe be insulated.

Insulation around the liner actually helps keep the pipe warm while you are burning a fire, which promotes a good draft. If the pipe does not stay warm, the gases produced by combustion will meet the cold metal and form condensation. As the fire burns and more gases meet with this condensation, a creosote buildup will occur.

Water vapor is always a byproduct of combustion. As long as the pipe stays warm enough this water vapor remains a vapor and floats up and out of the chimney. A warmer chimney pipe will prevent condensation from occurring and therefore lessen the amount of creosote that builds up with each use of the fireplace.