Top coats are used to cover the model with a clear substance which prevents paint from peeling off. It's also used to give your model a glossy look or a flat look depending on what type of coat you are using.

Gloss is usually used if you want the surface of the model to reflect a smooth constant amount of light making it look like the panels of a brand new car.

Flat or matt coating makes the model reflect a not so constant amount of light making the surface seem bland and old. This should be used if you want to give your models a more realistic look.

Lastly, semi-gloss is in between these polar extremes.