Police, North West Ambulance Service, the fire service and the North West Air Ambulance arrived on the scene at 1.45pm.
One injured person was being treated by paramedics and the elderly woman who was trapped in her vehicle had to be cut free by firefighters.
She was then airlifted to the Royal Preston Hospital with serious injuries.
The other patient was taken to the Royal Lancaster Infirmary by ambulance with minor injuries.
Currently the road between Hest Bank and Bolton-Le-Sands has been closed and it looks likely that it will remain so for the next two to three hours.
Firefighters were at the scene for approximately 55 minutes.
Police are still at the scene and said there was a road closure between Coastal Road and Byepass Road in Bolton-le-Sands.