The conventional method to evaluate thermal insulation capacity (TIC) of thermal barrier coatings involves the measurement of three parameters, which incurred a large accumulative error. To solve this problem, a self-designed new experimental apparatus was used in this work to compare the TIC of nine ceramic coatings composed of nine ceramic powders with different contents of Gd, Yb, Y and Zr, respectively, synthesized by a new fast hydrothermal method. It was found that the insulation temperature (ΔT) of Yttria-stabilized Zirconia (YSZ) coating mainly depended on the material property and thus reflected the TIC of coating by using this new apparatus. The ΔT value was the temperature difference between a blank sample without coating and a coating sample. The measured ΔT values were found to be highly reproducible. Thus, comparing TIC of the nine Gd-Yb-YSZ coatings by measuring ΔT was more accurate and rapid than the conventional method. The measured ΔT values of nine Gd2O3 and Yb2O3 added YSZ (Gd-Yb-YSZ) coatings were about 10–20 °C higher than that of YSZ coating at 1050 °C. This indicated that the addition of Gd and Yb enhanced TIC of YSZ coating.