Accident, no ticket, no insurance in effect

I was in an auto accident in Dec., 07. I didn't get a ticket and the police report said that I had not caused it but stated the other driver was andquot;innattentiveandquot;. I rearended them. The car was not the drivers and both driver and passenger went to the hosptital, however I don't know the extent of any injuries. I called to report the accident to my insurance co and learned that my insurance had lapsed due to nonpayment. They reinstated it the following day. One of the people in the accident now has an attorney stating that if I don't show proof of insurance, which I cannot, they will go to the state (I live in MO) and ask that my license be suspended until I pay her damages. Can this be settled w/o the state getting involved? I can't afford an attorney and AM keeping my insurance paid. Any advice would be appreciated.