BK King Install Question

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This is actually for a friend of mine that had some problems recently (house fire). Here is his set up: BK King in basement of new house, class A chimney up the middle of the house framed in with drywall all around. All installed to code (supposedly). During the ins co review after the fire they found that the flexible liner that was suppose to be around the outside of the class A chimney (as it passed through the main floor) had fallen (or was never completed) up to the fire stop as the chimney passed into the attic.

To be honest I do not read allot of the "help with install" type posts here as I have no installation knowledge (paid to have my BIS installed by a pro). So is this flexible liner on the outside of a chimney a standard thing? I do not think my BIS has it, but i did not see the install and the drywall was up by the time I got home that night.

The reason I ask is that I am concerned that he just had a standard chimney fire and I am concerned for his family. He does not believe in seasoning wood as the rest of us here do and is convinced (by the ins co) that he just had an improper installation.

I have tried to get him to this website but he has no interest, but I have very real concerns for the family (3 children under 5 years old).
 
Is the insurance co talking about the insulation sheild.
 
Not sure but I do not think so, this "flexible metal slinky" as he calls it, was to have been run on the outside of the chimney as it passed from the floor of the main level to the underside of the attic. This is in an interior wall space so there would be no insulation there.
 
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