There is no psychological definition of it.
There is the court’s definition of it, which is “Insanity. n. mental illness of such a severe nature that a person cannot distinguish fantasy from reality, cannot conduct her/his affairs due to psychosis, or is subject to uncontrollable impulsive behavior.”
But that is used in the court of law when someone is trying to plead insanity, and that is just the short definition of it.
In psychology there is no such thing as an “insane” diagnosis. There are MANY things a person can be diagnosed with, and defining it as “insane” is both unprofessional and irrational considering there could be a lot of loopholes and gaps and arguments over what it exactly means.
It’s more a state of mind in a moment, not an overall characteristic of a person.