The invention discloses halogen-free flame-retardant insulating paint and a preparation method thereof. The insulating paint is prepared from the following raw materials: phosphorus-containing unsaturated polyester resin, silicon-containing epoxy resin, bifunctional methacrylate, a curing agent, an accelerant, an initiator and a selectable flame retardant, the insulating paint is prepared by the following method: adding the prepared phosphorus-containing unsaturated polyester resin and silicon-containing epoxy resin into a reaction kettle, heating, vacuumizing and reacting, gradually cooling, sequentially adding the bifunctional methacrylate, the accelerant, the flame retardant, the curing agent and the initiator, filtering and packaging to obtain the insulating paint. The special phosphorus-containing unsaturated polyester resin and the silicon-containing epoxy resin are adopted and combined with the bifunctional methacrylate, an insulating layer formed after the insulating paint is cured has good flame retardance, proper viscosity is controlled, rapid curing at a low temperature can be achieved, and the use manufacturability is good.