Overlay

This is an example of an overlay edit. An overlay edit places a clip over the existing clip recording over it. To do this, you drag the clip from the source panal or even the program panal onto the timeline and lay it over the clips on the timeline its actualy really simple.

The difference between an overlay and an insert edit.
You would use an overlay when you want to record over the clip in the timeline ,

while you’d use an insert edit when you wish to make room for a new clip and you want to insert it between other clips.