Someone asked me where they should insert dialogue into the novel they were writing. I went blank for a moment, unable to comprehend the question. Insert dialogue? To a great extent, dialogue is the story. The most personal way people interact is by dialogue, and a story is or should be about people interacting, about relationships. Even action-oriented stories come down to a basic relationship: the hero vs the villain.
A better question might be where to insert exposition, but even that is a specious question. Nothing in a novel should be inserted. Each element should flow one into the other, making a cohesive whole. I’ve heard people say that they’ve finished writing their novel, now all they have left is to go back and insert the symbolism. If you have to insert something for the sake of inserting it, it’s better to leave it out. Symbols, like other elements should flow out of the story.
Novels need to balanced. Dialogue interspersed with exposition or action makes for a more interesting story than dialogue or exposition or action alone. A novel that is mostly dialogue seems lightweight; a novel with too much exposition feels heavy-handed; a novel that is all action gets boring after a while.
One way to make sure the elements flow together is to know what you are trying to accomplish. What kind of story are you writing? What is your story goal? What is your premise? What is the core conflict? Once you know the core of your story, you can make sure every element connects to it. Sometimes you won’t know the core until you’ve finished the first draft. In which case, just write, let the words flow out of you and into the story. Then, when the draft is finished, read it to see what you have. Do any themes jump out at you? What is the gist of the story (the core conflict)? How can you use the various story elements help you bring out that conflict? Does every action have a reaction? Does every reaction have a cause? Which element will bring the conflict into sharper focus? If a particular conflict is a physical one, then action interspersed with terse comments is best. If a particular conflict is personal, then dialogue interspersed with bits of action is best.
Where to insert dialogue, then, is not the real question. The real question is what do you want to say, and how do you want to say it?