Police officers are said to have stopped Mr Yousaf during routine checks on the A835 near Dingwall, Easter Ross, last Friday.
Mr Yousaf, 31, who has come under fire in recent weeks for his handling of problems on Scotland’s rail network, called it a “genuine mistake” and said that he ws “mortified”.
The minister was understood to have been on his way to a St Andrews’ Day dinner in Ullapool and was sharing the driving with a friend.
He told The Sun: “The police pulled me over for a roadside check. There was nothing wrong with the car, no lights out, I wasn’t speeding, there was no accident.
“They asked for my licence and did a routine check for insurance. They asked if I was insured and I said,’Absolutely, yes’. But they put it through their computer and they said, ‘No’.”
Mr Yousaf claimed the mix-up came about after he split up from his wife, which resulted in his wife being the main policy holder on their car insurance. That meant he was only insured to drive his own car.
Mr Yousaf now faces a fine of between £300 and £5,000 plus six penalty points on his licence.