prefab fireplace failure.

[Warpy]

1. Chimney fire? Eeek! Bad juju!

Since the expert has said that has occurred (and there's no reason to doubt him), do NOT use that thing until it is replaced by something else. Chimney fires can do a hell of a lot of damage you can't see and the whole business sounds completely unsafe. Fire insurance won't save you because you've been told the unit is unsafe.

My best advice is to invest in some electric space heaters for this year and try to get the thing replaced over the summer.