Dont break out the terra cotta!!!
The guys who suggest that they will break out the terra cotta liner are full of SH#T.
They just want to charge you an extra $1000 for the labor and material removal. And you end up with a huge dusty mess for no reason.
We just paid an installer ~$2700 for lining both of my flues - they go up 40'+ and I didn't have any good way of getting up there without a man-lift.
I'm willing to bet the terra cotta liner is in pretty decent shape. If it's 12 years old, unless the foundation is shoddy and the home and chimney have shifted, the liner should be a-ok. Take a look up the flue with a flashlight and see if the tiles line up. This is where a flex liner will be a benefit.
And I agree with the others 8x12 is too big for most modern wood burning appliances. Most modern inserts and wood stoves use 6" flue - but some use 8" so make sure you don't need an 8" flue for that monster wood-burning furnace.
With a SS flex liner and the terra cotta liner, AND a brick masonry chimney stack, you have EXXXXtra protection against a chimney fire getting out-of-hand. And if you DO have a chimney fire, you don't have to replace all of the masonry flue tiles ($$$$).
You can insulate the liner (ideal) or, since you are sealing the top and bottom of the terra cotta against the SS liner, you have a pretty good dead-air insulation space. With 6" flex going down an 8x12 flue, there isn't much space for an insulation wrap (1" on either side).
Just my $0.06 worth. :monkey: