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This is because the moisture created in wood burning fireplaces mixes with the creosote and this becomes a gas which rises out of the chimney. However – it really can't hurt and can benefit you in other ways.

Finally there's one more reason that insulation is a good idea for your chimney liner – and that's that having a hot fire and a cold chimney will cause down drafts. This is because air rises – meaning that the air pressure around your fire is lower. In other words there's a 'pocket' of air around your fire where much of the air has risen away, and if you don't have insulation for your liner, the cold air will rush in to fill this gap (this is the same process that causes wind – wherein the warm earth heated by the sun has the same effect as a fireplace).

If you don't get insulation and good flue liners then, you will find that the wind rushes in and blows the fire while also making your room colder. Again this will also create a lot of noise and be upsetting for you to listen too.