Insufficient storage for iPhone 16 backup

Did you check your iCloud Storage space?

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If an alert says that there's not enough iCloud storage

1. Open the Settings app, then tap your name.
2. Tap iCloud. At the top, you can check how much iCloud storage you've used.
3. Tap Storage or Manage Account Storage.
4. Tap Backups, then tap the device you're using. Next Backup Size should show you the size of the next backup. It might take a few minutes for your device to calculate Next Backup Size. 
5. If your backup needs more space than the amount you have available in iCloud, you can: 

• • Delete information that you don't need to reduce the size of your backup
  • Upgrade your iCloud+ plan to get more space

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copied from: If you can't back up to iCloud - Apple Support

Did you check the free storage space of your iCloud Account?

If you have the standard 5GB iCloud storage space, there might be not enough space to backup your iPhone to iCloud:

What's the difference between device storage and iCloud storage? - Apple Support