Homeowner's Insurance on Owner financed mortgage

[Lou Henley]

First time poster here, trying to help out my dad.  He's been flipping real estate since the 60's, and as he got older, landlording became a chore he could no longer handle, nor wanted to hire out, so he approached all his tenants and asked if they wanted to buy the house, with prior rent being applied as a down payment.  

One of his mortgagors (borrower/occupant) has some serious financial issues due to the death of her husband.  Dad restructured her loan to help, but we've discovered she can't afford homeowner's insurance.  We've tried everything, and due to her credit history, she can't find anything affordable.  He wonders if he could secure insurance (could he if he isn't the owner?), but that would be even more expense, and even less affordable.  

Here's my question.  As the mortgagee, is he responsible in any way if something happens with this house?  There is a promissory note, and a Deed of Trust for the transaction, and if you look up the property in county tax records, she is the owner and his name isn't reflected anywhere.

She owes a minimal amount on this home, and if a tornado or fire takes it down, she understands she is not covered, and theory still owes him for the balance, even though he also understands he'll never see that money.

What would you do?  Please be nice, I'm new here.  :)