Insanity vs Obsession
There is an ocean of difference between insanity and obsession. For one thing, insanity is a general condition of mental disorder. It is a state where one can not discern what is logical or not and what is right from wrong. It is a general break of mind from the realities of life.
Obsession on the other hand is just a form of insanity. It is a specific mental disorder that manifests when a person fails to control his passions. In the end, the passion eventually controls the person. This phenomenon therefore becomes obsession.
In a way, you can say that all obsessive persons are practically displaying insane behavior. In other words, they are insane. They have a specific mental disorder that needs to be treated. Meanwhile, not all insane people are suffering from obsession. There are numerous types of insane behaviors. Schizophrenics for example are not necessarily obsessive. Delusional or manic depressive sufferers may not display obsessive behavior.
People suffering from obsession can still function normally in other areas of life. For example, some diehard runners can become obsessed in running per se. So they will continue to run even if their physical conditions do not permit them to run. But they can still function effectively in other activities like going to work or taking care of everyday activities. But when it comes to their obsession, they will forget everything just to satisfy their urges to run.
With insane people, they have lost their ability to function effectively in almost all areas of life. A person that skidded into insanity will not be able to take care of himself and will not be able to establish social interaction. They are completely detached from reality thus they lose all normal functions.
Obsession and insanity are two different concepts. Obsession is a specific manifestation of insane behavior while insanity is the overall breakdown of logical thinking thus rendering the person incapable of functioning normally.