Person with umbrella observes flooded streets with cars in the water.
A person is standing outside in the rain looking at flood damage.
It is common to have an umbrella while outside in the rain.
If the person can see the flooded streets, they are outside.
An umbrella is only used in the rain. Observing something is the same as looking at it. If cars are in the water in flooded streets, the cars would be damaged by the flood.