Does CSST need the plastic coating around it?

Yes it does.
The Stainless steel tubing is thin and requires the vinyl coating for protection.
CSST isn’t rated for exterior use and the deterioration in your picture is exactly what happens.

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Thank you.

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Outdoor Installation

ANSI LC1-CSA 6-26 contains test requirements determining suitability for exposure of CSST to outdoor environments. HOME-FLEX® is certified to this standard and is suitable for outdoor installations. The HOME-FLEX® jacket is UV resistant and able to withstand exposure to sunlight for a limited time. Avoid prolonged exposure to direct sunlight to attain longevity of the jacket. When this is not possible, tubing should be routed in a non-metallic sleeve or wrapped in self-bonding silicone tape.

When installed outdoors, the yellow jacketing of HOME-FLEX® must be intact along the entire run. Any areas of tubing not covered by the jacket are to be wrapped with self-bonding silicone tape or sleeved to prevent damage from acids and chlorides.

If HOME-FLEX® is installed in the equipment room of a swimming pool or hot tub, or otherwise exposed to a corrosive environment which could be harmful to the tubing, the tubing shall be installed in a protective device, and any exposed portions of the stainless steel tubing should be wrapped with self-bonding silicone tape, beginning on the jacket and ending on the nut of the HOME-FLEX® fitting.

Care must be taken to protect HOME-FLEX® from mechanical damage when installed along the exterior of a building. If installed within 6 feet of the ground, HOME-FLEX® tubing must be routed within a conduit or chase. If installed in a location where the tubing will not be subject to possible mechanical damage, a conduit is not required, but is recommended.

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Same for Gastite;

OUTDOOR
Gastite®/FlashShield® Flexible Gas Tubing has passed all requirements of ANSI LC1/CSA 6.26, which include testing for
suitability for exposure of CSST piping systems to outdoor environments.
a) Outdoors – When installed outdoors, the external jacketing shall remain intact as much as practical for the given
installation. Any portions of the exposed stainless steel tubing shall be wrapped with tape or sleeved to prevent threats by
corrosive chemicals, especially chlorides. Self-bonding silicone tape is recommended here for durability.
b) Along side a structure – When installed along the outside of a structure (between the ground and a height of 6 ft) in
an exposed condition, the Gastite®/FlashShield® CSST shall be protected from mechanical damage inside a conduit
or chase. A conduit or chase is not required if the tubing is installed in a location that will not subject the Gastite®/
FlashShield® CSST to mechanical damage.

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The insulation can only be stripped back to the second valley in the CSST corrigations past the connector at the connections. Otherwise, the insulation must be there.

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