INSTALL_FAILED_INSUFFICIENT_STORAGE is a most common error that a Android Developer faces while trying to run a application on the Emulator.
To fix this issue :
1. Right Click on your Android Project Folder,
goto Run As -> Run Configurations
Select your Application at the left section
Move to Target Tab
In Additional Emulator Command Line Options add : -partition-size 2048
Apply the Changes are run the Emulator.