I work in insurance, and Umbrella is my specialty.
As stated by CoffeeR, there have been several discussions of Umbrella insurance before, many of which I've contributed to:
https://forum.mrmoneymustache.com/ask-a-mustachian/buy-umbrella-insurance/https://forum.mrmoneymustache.com/welcome-to-the-forum/how-do-you-shop-for-carhomeowners-insurance/https://forum.mrmoneymustache.com/ask-a-mustachian/anyone-ever-been-sued-for-liability-that-exceeded-your-insurance-coverage/To address your original question, I'm very confused as to what your insurance covers.
Question: I already have higher than normal coverages - 1 million on house (house only worth 150k), and 500k on each driver. I believe most of the coverage has a higher value for property damage than injury. My agent is advising that rather than getting a 1 million umbrella, I could just get 1 million liability on the cars. Would this be similar to getting a 1 million umbrella? Any other suggestions are welcome.
There are two different parts of homeowners and auto policies: the property damage/physical damage, and the liability piece. What your home and car are worth make up the basis of the property damage/physical damage side of this, as the insurance company is paying to repair or replace those items.
Liability coverage is for when you harm other people, and it is not tied to what your home/car is worth. Whether you paralyze someone with a 2019 Lamborghini or a 1979 Lincoln, they suffered the same injury.
An Umbrella policy provides extra liability coverage, but does not provide extra property damage or physical damage coverage.
Adding an extra million in limits to your auto policy would be similar to an umbrella, but wouldn't address the homeowners piece of it. You could request higher limits on that policy separately, but the reason that Umbrella policies exist is because it's generally cheaper to buy one extra limit of coverage for all policies rather than one on each policy.
Regarding the specific question about adding your "spouse" to the policy, unless there is something you haven't disclosed, there's no reason you shouldn't be able to do this. Typically, insurance companies only care about marriage in the opposite scenario, when someone is legally married but doesn't want to list their spouse on a policy. Companies don't allow that because they're generally required by state regulations to cover spouses, so they don't want to provide that coverage for free.
If your "spouse" is listed on the primary homeowners and auto policies, there's no reason for an umbrella policy to not list them. If they are not listed on the primary policies, that is your issue, not the umbrella.
I have personally listed a significant other who lived with me in a home that I owned separately on a homeowners policy. You just need to be up-front that you are not legally married, because that could be construed as a misrepresentation that allows them to retroactively cancel your coverage.