Insulators play the vital role in the power transmission, including traditional porcelain/glass insulator and silicone rubber based polymeric insulator. By coating the glass/porcelain insulators with silicone rubber, the advantages of organic and inorganic dielectrics are integrated. However, it was found that the breakdown probability of coated insulators under steep-front impulse increases significantly. It suggests the possible degradation of insulator material and might become the hidden danger of power system. Therefore, in this research, a great deal of steep-front impulse voltage tests are carried out over various types of insulators. It demonstrates that the performance degradation is introduced by RTV coating instead of intrinsic defects. Then, based on the analysis of flashover paths and breakdown locations, the breakdown mechanism of coated insulator under steep-front impulse is illustrated. Also, numerical simulation of electric field distribution is performed for verification, taking the surface arc development into account. It indicates that the development of surface arc is distorted by the coating which results in the intense local field and dielectric breakdown. Next, different controlled experiments are designed and conducted to validate the theory. Besides, the corresponding modification towards the current coating method is proposed.