On the Gutenberg editor, click at the plus icon


Or start typing /i or /m


You can:
- Upload in image
- Insert from the Media Library, assuming you have already uploaded it to your WordPress site
- Insert from URL
To add images via the Media Library
- Go to Media > Library then Select Files
- Go to Media > Add New

To change the alignment or position of your image

The Wide width and Full width options are only available on WordPress default themes or at least themes that are based on the default themes.