Basalt fiber (BF) has high mechanical strength, good insulation performance and low cost. It is suitable to be used as reinforcement material in the manufacture of electrical equipment. However, the large surface inertia of basalt fiber makes it difficult to combine with the matrix material, which seriously limits its service life and application scenarios. In addition, the serious vacancy in the research of insulation properties also limits its production and application in the electrical field. Therefore, in order to solve the problem of difficult bonding between basalt fiber and resin matrix and make up for the research blank of basalt fiber composites in insulation performance, this paper provides a basalt fiber modification method—SiO2 coating, and tests the insulation and mechanical properties of the modified composite. We used nano-SiO2 coating solution to modify basalt fiber, and manufactured BF/resin composite (BFRP) by hand lay-up and hot-pressing technology, and experimentally analyzed the influence of nano-SiO2 content on the mechanical and insulation properties of the modified composite. Fourier transform infrared spectrum and scanning electron microscope analysis showed that nano-SiO2 was successfully coated on basalt fibers. Through the microdroplet debonding test, it was found that the IFSS of fiber/resin was improved by 35.15%, 72.97 and 18.9%, respectively, after the modification of the coating solution with SiO2 concentration of 0.5%, 1% and 1.5%, showing better interface properties; the single fiber tensile test found that the tensile strength of the modified fiber increased slightly. Among all composites, 1 wt% SiO2 coating modified composites showed the best comprehensive properties. The surface flashover voltage and breakdown field strength reached 13.12 kV and 33 kV/mm, respectively, which were 34.6% and 83% higher than unmodified composite. The dielectric loss is reduced to 1.43%, which is 33.8% lower than the dielectric loss (2.16%) of the untreated composite, showing better insulation ability; the tensile strength, bending strength and interlaminar shear strength were increased to 618.22 MPa, 834.74 MPa and 16.29 MPa, respectively, which were increased by 53%, 42.4% and 59.7%, compared with untreated composites. DMA and glass transition temperature showed that the modified composite had better heat resistance. TGA experiments showed that the resin content of the modified composite increased, and the internal structure of the composite became denser.