But then, some would argue that instead of LLCs (costly), I should hop for an Umbrella Insurance. 

Any specialized trades/subs will be under the umbrella of your selected GC. 

As far as insurance goes you can you can also get an "Umbrella Policy" that can cover a much higher policy liability to help protect against a major injury or death.To be honest if you do not have a lot of assets or multiple properties changing to an LLC is not a huge benefit.

Just keep it in your personal name, carry $1M or so in liability, as an umbrella once you have another home, sleep well. 

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

Just get the correct insurance.You can get an umbrella policy if you want better protection than a poorly setup and ran LLC will give you.

And if nothing is in the lease stating that smoking is prohibited, smoke smell falls more under the umbrella of “ normal wear and use”.

Or just getting an umbrella policy?

If you're worried about Liability you can get an umbrella policy.

They recommended a standard rental policy with an umbrella policy on top.