From Arkham Horror Wiki
An investigator that is reduced to 0 Sanity is driven temporarily insane. If in Arkham, move the investigator to Arkham Asylum. If in an Other World, move the investigator to Lost in Time and Space. The player must then "heal" in one of two ways:
- 1. They must immediately discard half of their items and half of their Clue tokens (rounding down), as well as all of their retainers. The investigator gains 1 Sanity token. The investigator has no further encounters this turn, but may take his next turn as normal.
- 2. The investigator may instead choose to gain a Madness card. If he does this, he does not lose any items or Clue tokens for being driven insane, and his Sanity is restored to its maximum value instead of to 1. The investigator has no further encounters this turn, but may take his next turn as normal.