Quote from @Marc S.:
Unless someone can correct this, ultimately, I would need to get a renters policy while living with my in-laws. I was also told that in other states, there are certain renters' policies that do not allow for "renters" in their homeowners insurance policy.
So, what I need to do now is find out if my in-laws homeowners' policy (Here in NY) allows for renters, if it does, I have to get a basic renters policy for me and then I can get the umbrella. The major issue is if my in-law's policy does not allow for renters, I am really f-ucked. The other issue is my wife, and I are trying to not involve my in-laws (her parents) in our business.
If any is from NY and can confirm this, please let me know.
This should be quite simple. All you need to do is get a renters insurance policy and then an umbrella policy as others have indicated. The part about your in-laws homeowners insurance isn't really relevant. They've already allowed you to stay at their house. If they have issues with their homeowners insurance it won't have anything to do with you trying to purchase your own renters insurance for your own personal liability.
