I came across the INSTALL_FAILED_INSUFFICIENT_STORAGE error when I tried to install my app on the Android emulator. I found out that the storage of my Android emulator has run out.
I have tried to update the Internal Storage of AVD directly but it did not work for me.
Finally I figured out that I had to run the following command in the terminal to update the size of the storage of Android emulator.
emulator -avd your_AVD_name -partition-size size_in_MBs
In my case, I run it like this
emulator -avd Pixel_XL_API_32 -partition-size 4096
You could find out the name of your AVDs by running this
Hope it helps,