A system and method for diagnosing insulation-breakdown of a vehicle component including a system in a vehicle including high voltage components are provided. The system includes a battery pack that is configured to supply a high voltage to the vehicle and a high voltage relay that is connected to an output stage of the battery pack. Additionally, a high voltage component controller is connected to an output stage of the high voltage relay to turn the high voltage component on and off. A battery management system interlocks with the battery pack, the high voltage relay, and the high voltage component controller to diagnose whether the battery pack, an input stage of the high voltage component controller, and the high voltage component are insulated-breakdown.