Losing fat isn't all about exercising, diet will always be king. I'm also worried that you aren't getting enough protein in your diet since you're a vegetarian. Check your diet, count calories everyday, know how much you should be eating. I don't want to be too technical, but for your height and weight you should be eating around 1000-1500 calories to lose weight. This is a rough estimate, you can go on google and search for BMR calculators, if you want to make sure. Insanity was pretty intense from what I remembered. I stopped after 1 month, I wasn't satisfied with the results, but many people had results so don't get discouraged. Best of luck, make sure you count your calories!!!
Muscle definition is fat loss... You sure aren't gaining muscle with insanity so you have lost fat.