Let's say that your net worth is $1 million and, to protect yourself, you take out an umbrella insurance policy with a maximum liability of $1 million.
Then suppose something terrible happens and you get sued.
Is it possible that you could get sued for $2 million and that you would lose everything despite having insurance?
It seems that the recommendation for umbrella insurance is to get coverage equal to your net worth. If you can get sued for more than the maximum liability of the insurance, then that seems like bad advice.