The emerge of Terahertz (THz) radar systems allows the short-range applications such as material characterization, hyper accuracy localization at cm or even better level, scattering analysis of rough surfaces, and material defect detection. The paper presents the experimental results about material defect detection based on synthetic aperture radar (SAR) operating at THz frequencies. For the experiments, an electrical insulator is damaged causing the defects in the orders of mm and sub-mm. A SAR testbed at THz frequencies built with a vector network analyzer and a frequency extender in the frequency range 325-500 GHz is used to measure the electrical insulator in the form of SAR with a two-dimensional (2D) aperture. The damaged parts inside the electrical insulator can be observed clearly in the three-dimensional (3D) SAR image. This supports the material defect detection that enhances monitoring industrial production processes and controlling product quality.