There are two ways to insert an image from file: insert with default settings or adjust image properties before inserting it.
Inserting image with default settings
Click button in the editor toolbar and select From file...:
Then select the desired image and click Open.
Inserting image with custom settings
Click button in the editor toolbar and select Insert and customize... or press Ctrl+Shift+P:
A dialog appears. Click the From File button:
Select the desired image and click Open. The selected image will be displayed in the viewport. Click the Insert button.
Once you click button the following dialog appears:
Use this dialog to browse for an image file or capture a new screenshot and define the image properties. To change the image properties, right-click image and select Image properties menu item from the context menu or double-click the image.
Image source
Use this field to specify the type of the image: annotated screenshot, control image, control bullet, or a custom image. When you add a new image from a file, Custom will be selected by default.