Dialogue requires more punctuation than regular sentences.
For the most part, standard written English uses Double Quotation Marks to enclose dialogue, or the words people say out loud to each other. The first pair of quotation marks appears before the first spoken word, and the second pair appears at the end of the utterance (after the final punctuation mark of the spoken remark).
“Psst!” said the elephant.
Dialogue tags are phrases that identify who is speaking and the manner (or attitude) in which they are speaking:
Dialogue tags can come before dialogue, after dialogue, or in the midst of dialogue (creating a divided quotation). When the dialogue tag appears before the dialogue, it is followed by a comma, a space, and then the opening double quotation marks.
She said, “Don’t worry about it, I have insurance.”
When the dialogue tag appears after the dialogue (at the end of the sentence), a comma (or question mark, or exclamation point) appears before it, which is directly followed by the closing double quotation marks. The dialogue tag is then followed by a period.
“Don’t worry about it, I have insurance,” she said.
“Don’t worry about it, I have insurance!” she said.
“Don’t you have insurance?” she asked.
When the dialogue tag appears in the middle of dialogue, it can be sandwiched by commas, or simply be caught between the end of one spoken statement and the beginning of another by the same speaker.
“Don’t worry,” she said, “I have insurance.”
“Don’t you have insurance?” she asked. “I thought everyone had to have some form of insurance!”
“Why do you keep asking me that?” he asked, becoming more exasperated with each word in the question. “I don’t even know you!”
You may have noticed in the last two examples of dialogue that there were two speakers exchanging dialogue. Notice how the dialogue for each speaker is indented. Every time you switch speakers begin a new paragraph by starting a new line with an indent. This allows the reader to see that you’ve switched speakers.