Do you have a citation to a judicial opinion in the case you've described? As it happens, I do have a fair amount of experience with insurance law. "An illegal alien hit my friend and it wasn't covered by insurance" tells us nothing. For instance, was it the illegal alien's policy or someone else's? Was the court's decision based on lack of coverage, on who was at fault, or what? And so on. A story like yours, with no detail, is of no help in understanding what the law on this is. It's like saying "A guy named Jones ran over my friend and didn't have to pay. This shows that the courts always rule in favor of guys named Jones." Well, no.