This invention relates to novel airbag coating compositions and systems comprising heat-expandable microspheres that provide effective insulation for the target airbag fabric during exothermic inflation. The inventive airbag fabrics are either pre-calendered prior to application of this composition or are coated through a floating knife method with such heat-expandable microsphere-containing compositions. The coated airbag fabrics and cushions may then be heated to expand the microsphere constituents of the coating compositions both within the interstices between the individual yarns of the fabric and over the raised yarns of the fabric. Such a coating system thus provides an extremely high degree of protection from heat exposure that permits structural integrity of the target airbag cushion airbag and provides protection from such high inflation temperatures to a vehicle passenger cushion during such a highly exothermic inflation event. The method of forming such specific airbag coating systems on airbag fabrics is also encompassed within this invention.