Vinyl cations derived from diazo ketones participate in transition-metal-free C-H insertion reactions, but the corresponding amide and ester analog exhibit divergent reactivity profiles. Whereas cations formed from diazo ketones undergo a rearrangement and C-H insertion sequence, those from diazo amides do so less efficiently and tend to be competitively trapped before the insertion step occurs. Diazo esters undergo several rearrangement steps and fail to insert. DFT calculations reveal that this disparity stems from two factors: differing levels of electrostatic stabilization of the initially formed vinyl cation by the adjacent carbonyl oxygen and predistortion of the ketone and amide systems toward C-H insertion. The computational data is in strong agreement with experimental results, and this study explains how structural and electronic factors determine the outcome of reactions of diazo carbonyl-derived vinyl cations.