Well, they could. They already have the risk of a home losing value, or a homeowner damaging a home in a way not covered by insurance, or a flood, etc. They charge interest on the mortgage, and part of that is to cover losses from some mortgages going bad in some way that can't be recovered by selling the property.
A lender would only have to raise their interest rates, in exchange for not requiring insurance.
Of course, a homeowner would still be faced with the loss of their house and property in a disaster.
Under what terms would you routinely grant $100k-$500k loans on property that the owner couldn't insure?
I suspect that your terms would not be acceptable in the housing market.