Which leaves me to think I just need a big umbrella policy.

I feel I can justify my actions, have access to good lawyers, and have an umbrella coverage. 

A judgment against you will take that asset or force you to sell it.Get Landlord Insurance and a good Umbrella.

I get threatened with law suit semi regular, but never get sued (but I do have an umbrella coverage that provides peace of mind). 

My attorney advised against an LLC, saying it just creates a lot of extra paperwork and expense, and recommended an umbrella policy instead.  

Additionally An umbrella policy is also a good idea regardless 

I'm also a little confused as to how the 2 LLCs would be connected....So, if you have an LLC that's owned by another LLC (parent umbrella LLC), does that mean you have to register as a foreign entity?

Umbrella Insurance Policy: Keep a $2,000,000 policy over all of your houses.The lawyers don't want your personal assets.

etc...Lastly, as an insurance agent- I would make sure you get an umbrella policy if you don't already have one to further insulate you from liability created with the dog (if you begin allowing pets-increasing your exposure). 

Cases like the 16.6 Million Dollar Chicago Fatal Porch Collapse of 2003 were 13 people died and 57 more were injured that took ten years to litigate...I can't find enough facts from articles online to really know how the owner was only out $660,000 when it doesn't appear to be in any kind of corporate structure that provides liability protection, and he owned 20-30 other buildings at the time....it appears he simply had a boatload of umbrella insurance but I can't tell anything for sure.