Fireplace inserts burn hotter than a conventional fireplace and put more thermal stress on the chimmney. What typically happens is the ceramic liner and/or joints within the chimney fail and a fire starts in the adjacent house framing. This happened to my in-laws. They now have a stainless steel liner cemented into their conventional fireplace chimney.

I am trying to line my chimney with a 6" stainless steel liner. It has an 8" clay line adn if I push the pipe "square" it goes down but I can only get it down about a foot. I haven't tried to use any mechanical means to get it in but maybe that is the only way? I appreciate any help. Thanks!

Side wall venting of an oil fired 80%, which is most common, appliance is called "power venting". There are two manuf of power venters. Field Controls and Tjernlund. In my business I represented Tjernlund for 20 years and have a lot of them installed in the Northeast, where 80% of oil heat is located. As I noted previously, back in the 80's I represented a company who made a condensing oil fired furnace. They had other excellent products but the condensing unit put them out of business. Power venters are excellent products BUT, they have to be installed and serviced by a real tech. The biggest problem with PV is that the servicing company will clean the furnace or boiler and not touch the PV. Everything that goes through the furnace goes through the PV. When properly serviced they are an excellent exhaust system for oil appliances Power venters on oil boilers which also provide hot water are an occasional problem if located where the fumes from combustion are venting close to your deck or by a window which you want to open. The flue gases get blown out of the building but then waft along the wall to your BBQ and, well, if you can believe it, some people don't like the smell. If it is a winter only operation the odor issue is much reduced as the patio is not used and the windows are closed. Of the two manuf of PV, while I am biased, I think Tjernlund makes the best. I can defend that technically, but wlll offer one point. The Field's unit blows the gases straight down against the side of the house where the Tjernlund blows them straight away from the building. A properly set up condensing oil furnace is a very efficient appliance. That said, they are service intensive and have not been embraced by the oil companies. This is after 30 yrs on the market. If the techs don't like them, then you had better not like them either. My biggest problem with oil heat is that there has just not been any technology advances in the business. Why after all these years is there not an effective reliable modulating burner? Oil has 140kbtu, vs 100k for NG and 92 kbtu for LP. My feeling is that the modulating technology common in gas appliances makes up the difference in heat potential in the benefits of modulation. For the OP I just can't see trying to save a chimney that has deteriorated to the point that it is separating from the building. That is the result of decades of condensation and acidic consumption of the flue itself. There is no way that chimney passes the requirements of NFPA 211-Chimneys & flues, NFPA 54-Gas Code or NFPA 31-Oil Installation, all of which have an inspection requirement which this flue simply will not meet. Lining a structurally sound chimney makes sense. Lining a compromised chimney is throwing good money after bad, imho!

I'm glad that LPup jumped in there. I know that you should have a liner, but I don't know the particulars of the code. What I understood is that you must have a liner for the water heater always, just because the water heater is working in the summer when the furnace isn't. The other problem is that the flue gases from a gas appliance vented into a masonry chimney can often condense and the condensate is acidic -- causing damage to the liner. The side of my liner that had the furnace and water heater vented into it is all pitted. To answer you question, "does it need to happen in the short term since you will be replacing it soon?"--- what I will tell you is that there are thousands (and thousands) of improperly vented water heaters in masonry chimneys without a liner. I am not condoning it and it's definitely something that you want to correct when you have the opportunity. BTW: This is one of my arguments for a tankless water heater making financial sense. Too often people compare the cost of a tankless to the cheapest standard tank heater and conclude there isn't a reasonable payback. When you have to pay to properly vent a standard heater, (install a liner) the numbers change. When I was looking at a water heater, the cost of the tankless and vent kit was the same as the powervent (about $900). I went with the tankless and got a $300 tax credit + I'm saving 25-30% on my water heating costs.