What happens if an uninsured driver in an insured car is cited for a traffic violation or is involved in an accident?

Insurance follows the car, not the driver. If you had permission to use it you should be fine. If you were cited for a traffic violation, you should just pay it ahead of time and then apologize profusely to your friend, since you just raised his rates for several years. If there was an accident and it involved any serious amount of money / injury, shell out the $70 and ask an attorney.