They are used on the top of the chimney to prevent animals and debris from getting in the chimney and clogging up the flue from the fireplace
. If they are not in place there is a risk that squirrels and birds will get into the chimney and clog up the flue. Worst case scenario they get into the flue get stuck and wind up dying there causing a terrible odor in the house.
There are different chimney caps for metal chimneys and for masonry chimneys. It is much more advantage to have a cap in place for a metal chimney than it is for a masonry or brick chimney.
Metal chimneys are often used for wood burning stoves or stand alone fireplaces that are not built into the wall. It is almost necessary to cap these types of chimneys. The metal chimney is typically a metal tube poking out of the roof, in this case the cap serves two purposes the obvious purpose of keeping animals and debris out but also to keep downdrafts and rain out as well. The caps in this case are always made of metal and are typically round in shape and are tight fitting. The shape makes it difficult for animals to climb on and discourages them from trying to tear into the chimney caps to get to the warmth underneath.
With masonry or brick chimneys, chimney caps can be used but are not a necessity. They can provide the same types of protections as that used on a metal chimney but there are some disadvantages to consider. In some cases the caps may discolor the chimney over time from soot buildup that will lodge in the cap and over time run down the side of the chimney. Because the cap is usually larger that they type used with a metal chimney you also risk the cap itself becoming clogged.