SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

               Quarterly Report Under Section 13 or 15 (d) of the
                        Securities Exchange Act of 1934

        For the quarterly period from July 1, 2001 to September 30, 2001

                           Commission File No. 0-3978


                           UNICO AMERICAN CORPORATION
             (Exact name of registrant as specified in its charter)

            Nevada                                               95-2583928
 (State or other jurisdiction of                              (I.R.S. Employee
  incorporation or organization)                             Identification No.)

            23251 Mulholland Drive, Woodland Hills, California 91364
               (Address of Principal Executive Offices) (Zip Code)

                                 (818) 591-9800
                          Registrant's telephone number

           Securities registered pursuant to Section 12(b) of the Act:
                                      None
                              (Title of each class)

           Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, No Par Value
                                (Title of Class)

                                    No Change
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X No

                                   5,452,461
       Number of shares of common stock outstanding as of November 9, 2001


                                       1
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
-----------------------------

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                                                         September 30          December 31
                                                                                             2001                  2000
                                                                                             ----                  ----
<S>                                                                                       <C>                   <C>

ASSETS
------
Investments
   Available for sale:
      Fixed maturities, at market value (amortized cost:  September 30,
         2001  $92,195,438;  December 31, 2000  $94,798,077)                               $95,691,113           $94,982,630
      Equity securities at market (cost: September 30, 2001
         $2,400;  December 31, 2000  $25,920)                                                    2,400                25,920
   Short-term investments, at cost                                                           2,987,946             3,355,354
                                                                                            ----------            ----------
      Total Investments                                                                     98,681,459            98,363,904
Cash                                                                                            69,806                54,806
Accrued investment income                                                                    1,536,078             1,908,547
Premiums and notes receivable, net                                                           6,333,353             5,807,731
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                                     13,278               393,198
   Unpaid losses and loss adjustment expenses                                                9,910,069            10,671,343
Prepaid reinsurance premiums                                                                    47,632                29,531
Deferred policy acquisition costs                                                            4,953,673             4,500,147
Property and equipment (net of accumulated depreciation)                                       277,563               114,107
Deferred income taxes                                                                                -               948,442
Other assets                                                                                 3,481,846             1,154,064
                                                                                           -----------           -----------
     Total Assets                                                                         $125,304,757          $123,945,820
                                                                                           ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
-----------
Unpaid losses and loss adjustment expenses                                                 $50,826,865           $45,217,369
Unearned premiums                                                                           18,984,678            17,099,927
Advance premium and premium deposits                                                         1,466,518             2,316,016
Deferred Income taxes payable                                                                   60,237                     -
Accrued expenses and other liabilities                                                       6,580,991             7,899,179
                                                                                            ----------            ----------
    Total Liabilities                                                                      $77,919,289           $72,532,491
                                                                                            ----------            ----------

STOCKHOLDERS' EQUITY
---------------------
Common stock, no par - authorized 10,000,000 shares; issued and
   outstanding shares 5,452,461 at September 30, 2001, and 5,692,699 at
   December 31, 2000                                                                      $  2,671,377          $  2,789,494
Accumulated other comprehensive income                                                       2,307,146               121,805
Retained earnings                                                                           42,406,945            48,502,030
                                                                                            ----------            ----------
  Total Stockholders' Equity                                                               $47,385,468           $51,413,329
                                                                                            ----------            ----------

  Total Liabilities and Stockholders' Equity                                              $125,304,757          $123,945,820
                                                                                           ===========           ===========
</TABLE>

            See notes to unaudited consolidated financial statements.


                                       2
<PAGE>


                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                Three Months Ended                   Nine Months Ended
                                                                   September 30                        September 30
                                                                -------------------                 ------------------
                                                             2001               2000               2000             2001
                                                             ----               ----               ----             ----
<S>                                                      <C>                  <C>               <C>              <C>

REVENUES
--------
Insurance Company Revenues
     Premium earned                                       $9,014,402          $8,226,204        $26,004,015      $24,436,649
     Premium ceded                                         1,523,605           2,136,835          4,294,094        5,090,947
                                                           ---------           ---------         ----------       ----------
          Net premium earned                               7,490,797           6,089,369         21,709,921       19,345,702
     Net investment income                                 1,395,287           1,451,540          4,195,465        4,294,899
     Net realized investment (losses)                              -                   -            (23,520)               -
     Other income                                              2,572              34,286             17,325           43,934
                                                           ---------           ---------         ----------       ----------
          Total Insurance Company Revenues                 8,888,656           7,575,195         25,899,191       23,684,535

Other Revenues from Insurance Operations
     Gross commissions and fees                            1,375,654           1,383,049          4,124,453        4,267,109
     Investment income                                        30,656              78,874            129,277          274,229
     Net realized investment gains                                 -               2,508              3,212            2,508
     Finance charges and late fees earned                    223,722             209,423            644,929          625,455
     Other income                                              5,517               4,402             11,998            9,021
                                                          ----------           ---------         ----------       ----------
          Total Revenues                                  10,524,205           9,253,451         30,813,060       28,862,857
                                                          ----------           ---------         ----------       ----------

EXPENSES
--------
Losses and loss adjustment expenses                       11,636,974           5,054,246         25,313,741       14,744,673
Policy acquisition costs                                   2,233,370           2,098,883          6,400,459        6,205,450
Salaries and employee benefits                             1,052,922           1,067,731          3,283,212        3,247,594
Commissions to agents/brokers                                304,355             330,569            944,172          987,364
Other operating expenses                                     606,386             575,917          1,928,529        1,914,886
                                                          ----------           ---------         ----------       ----------
     Total Expenses                                       15,834,007           9,127,346         37,870,113       27,099,967
                                                          ----------           ---------         ----------       ----------

     Income (Loss) Before Taxes                           (5,309,802)            126,105         (7,057,053)       1,762,890
Income Tax Provision (Benefit)                            (1,801,252)            (29,325)        (2,503,882)         360,379
                                                           ---------             -------          ---------        ---------
     Net Income (Loss)                                   $(3,508,550)          $ 155,430        $(4,553,171)      $1,402,511
                                                           =========             =======          =========        =========


PER SHARE DATA
--------------
Basic Shares Outstanding                                   5,453,118           5,923,682          5,518,239        6,166,220
Basic Earnings (Loss) Per Share                               $(0.64)              $0.03             $(0.83)           $0.23

Diluted Shares Outstanding                                 5,453,118           5,972,337          5,518,239        6,211,027
Diluted Earnings (Loss) Per Share                             $(0.64)              $0.03             $(0.83)           $0.23

</TABLE>


            See notes to unaudited consolidated financial statements.


                                       3
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                        STATEMENT OF COMPREHENSIVE INCOME
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                    Three Months Ended                    Nine Months Ended
                                                                       September 30                          September 30
                                                                       ------------                          ------------
                                                                  2001              2000                2001            2000
                                                                  ----              ----                ----            ----
<S>                                                           <C>                 <C>               <C>              <C>

Net income (loss)                                             $(3,508,550)        $155,430          $(4,553,171)     $1,402,511
Other changes in comprehensive income,
  net of tax:
     Unrealized gains (losses) on securities
        classified as available-for-sale arising
        during the period                                       1,425,058          615,760            2,171,938         426,088
     Less: reclassification adjustment for (gains)
        and losses included in net income                                                -               13,403
                                                                        -                                                     -
                                                                ---------          -------            ---------       ---------
            Comprehensive income (loss)                       $(2,083,492)        $771,190          $(2,367,830)     $1,828,599
                                                                =========          =======            =========       =========

</TABLE>

            See notes to unaudited consolidated financial statements.


                                       4
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,


<TABLE>
<CAPTION>

                                                                                          2001                   2000
                                                                                          ----                   ----
<S>                                                                                    <C>                    <C>

Cash Flows from Operating Activities:
   Net Income (Loss)                                                                   $(4,553,171)           $1,402,511
   Adjustments to reconcile net income to net cash from operations
      Depreciation and amortization                                                         52,871                49,184
      Bond amortization, net                                                               288,065               412,056
      Net realized (gain) loss on sale of securities                                        20,308                (2,508)
   Changes in assets and liabilities
      Premium, notes and investment income receivable                                     (153,153)               94,140
      Reinsurance recoverable                                                            1,141,194            (1,886,669)
      Prepaid reinsurance premiums                                                         (18,101)                   21
      Deferred policy acquisitions costs                                                  (453,526)             (171,468)
      Other assets                                                                      (2,327,782)              216,594
      Reserve for unpaid losses and loss adjustment expenses                             5,609,496            (2,001,294)
      Unearned premium reserve                                                           1,884,751               558,545
      Funds held as security and advanced premiums                                        (849,498)             (196,316)
      Accrued expenses and other liabilities                                            (1,318,188)            1,707,999
      Income taxes current/deferred                                                       (117,103)               81,080
                                                                                           -------               -------
          Net Cash Provided (Used) from Operations                                        (793,837)              263,875
                                                                                           -------               -------

Investing Activities
     Purchase of fixed maturity investments                                            (10,399,695)           (8,703,237)
     Proceeds from maturity of fixed maturity investments                               12,692,180            10,201,450
     Net decrease in short-term investments                                                392,710             3,071,080
     Additions to property and equipment                                                  (216,327)              (25,386)
                                                                                         ---------             ---------
          Net Cash Provided by Investing Activities                                      2,468,868             4,543,907
                                                                                         ---------             ---------

Financing Activities
     Repurchase of common stock                                                         (1,387,398)           (3,784,934)
     Dividends paid to shareholders                                                       (272,633)             (945,510)
                                                                                         ---------             ---------
          Net Cash (Used) by Financing Activities                                       (1,660,031)           (4,730,444)
                                                                                         ---------             ---------

Net increase in cash                                                                        15,000                77,338
Cash at beginning of period                                                                 54,806               105,439
                                                                                            ------               -------
          Cash at End of Period                                                            $69,806              $182,777
                                                                                            ======               =======

Supplemental Cash Flow Information
     Cash paid during the period for:
          Interest                                                                           $  75                  $  -
          Income taxes                                                                     $25,416              $210,025

</TABLE>


            See notes to unaudited consolidated financial statements.


                                       5
<PAGE>


                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
Nature of Business
------------------
Unico American  Corporation  is an insurance  holding  company that  underwrites
property  and  casualty  insurance  through its  insurance  company  subsidiary;
provides  property,  casualty,  health  and life  insurance  through  its agency
subsidiaries;  and provides  insurance premium financing,  claim  administration
services,  and membership  association  services through its other subsidiaries.
Unico American Corporation is referred to herein as the "Company" or "Unico" and
such references include both the corporation and its subsidiaries,  all of which
are wholly owned, unless otherwise  indicated.  Unico was incorporated under the
laws of Nevada in 1969.

Principles of Consolidation
---------------------------
The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts of Unico American  Corporation  and its  subsidiaries.  All significant
inter-company accounts and transactions have been eliminated in consolidation.

Basis of Presentation
---------------------
The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") for interim
financial  information  and the  instructions  to Form  10-Q and  Article  10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes required by GAAP for complete financial statements.  In the opinion of
management,   all  adjustments  (consisting  of  normal  recurring  adjustments)
considered  necessary  for a fair  presentation  have been  included.  Operating
results  for the  three  and nine  months  ended  September  30,  2001,  are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2001.  Quarterly financial statements should be read in conjunction
with the financial  statements  and related  notes in the Company's  2000 Annual
Report on Form 10-K as filed with the Securities and Exchange Commission.


NOTE 2 - INCENTIVE STOCK PLANS
------------------------------
The Company's  1985 stock option plan provided for the grant of incentive  stock
options to officers and key employees. The plan covers an aggregate of 1,500,000
shares of the Company's common stock (subject to adjustment in the case of stock
splits, reverse stock splits, stock dividends, etc.). As of September 30,  2001,
there were 71,275 options outstanding and all are currently  exercisable.  There
are no additional options available for future grant under the 1985 plan.

The Company's 1999 Omnibus Stock Plan also provides, among other things, for the
grant of  incentive  options to officers and key  employees.  The plan covers an
aggregate of 500,000 shares of the Company's common stock (subject to adjustment
in the case of stock splits, reverse stock splits, stock dividends, etc.). As of
September 30,  2001,  there were options covering 105,000 shares of common stock
outstanding  under this plan.  Options covering 70,000 of these shares of common
stock were exercisable.


NOTE 3 - REPURCHASE OF COMMON STOCK - EFFECT ON STOCKHOLDERS' EQUITY
--------------------------------------------------------------------
The Company has previously  announced that its Board of Directors had authorized
the  repurchase  in the open market from time to time of up to an  aggregate  of
945,000 shares of the common stock of the Company.  During the nine months ended
September 30, 2001,  the Company  retired an aggregate of 240,358  shares of its
common stock at a cost of $1,387,398 of which  $118,117 was allocated to capital
and $1,269,281 was allocated to retained earnings. As of September 30, 2001, the
Company had purchased and retired under the Board of Directors  authorization an
aggregate of 868,958 shares of its common stock at a cost of $5,517,465.


                                       6
<PAGE>


                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 4 - EARNINGS PER SHARE
---------------------------
The  following  table  represents  the  reconciliation  of  the  numerators  and
denominators of the Company's basic earnings per share and diluted  earnings per
share computations reported on the Consolidated Statements of Operations for the
three months ended  September  30, 2001 and 2000,  and for the nine months ended
September 30, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                  Three Months Ended                 Nine Months Ended
                                                                     September 30                      September 30
                                                                     ------------                      ------------
                                                                 2001            2000              2001               2000
                                                                 ----            ----              ----               ----
<S>                                                          <C>              <C>              <C>                 <C>
Basic Earnings (Loss) Per Share
-------------------------------
Net income (loss) numerator                                  $(3,508,550)       $155,430       $(4,553,171)        $1,402,511
                                                               =========         =======         =========          =========

Weighted average shares outstanding denominator                5,453,118       5,923,682         5,518,239          6,166,220
                                                               =========       =========         =========          =========

     Basic Earnings (Loss) Per Share                              $(0.64)          $0.03            $(0.83)             $0.23


Diluted Earnings (Loss) Per Share
---------------------------------
Net income (loss) numerator                                  $(3,508,550)       $155,430       $(4,553,171)        $1,402,511
                                                               =========         =======         =========          =========

Weighted average shares outstanding                            5,453,118       5,923,682         5,518,239          6,166,220
Effect of diluted securities (*)                                       0          48,655                 0             44,807
                                                               ---------       ---------         ---------          ---------
Diluted shares outstanding denominator                         5,453,118       5,972,337         5,518,239          6,211,027
                                                               =========       =========         =========          =========

     Diluted Earnings (Loss) Per Share                            $(0.64)          $0.03            $(0.83)             $0.23

* In loss periods options are excluded from the calculation of diluted EPS, as
  the inclusion of such options would have an antidilutive effect.

</TABLE>


NOTE 5 - SEGMENT REPORTING
--------------------------
Statement of Financial Accounting Standards No. 131 (SFAS No. 131),  Disclosures
about Segments of an Enterprise and Related  Information,  became  effective for
fiscal  years  effective  after  December  15,  1997.  SFAS No. 131  establishes
standards  for the way  information  about  operating  segments  is  reported in
financial  statements.  The Company has adopted SFAS No. 131 and has  identified
its insurance company operation, Crusader Insurance Company ("Crusader"), as its
primary  reporting  segment.   Revenues  from  this  segment  comprised  84%  of
consolidated  revenues for the three and nine months ended  September  30, 2001,
and 82% of revenues for the three and the nine months ended  September 30, 2000.
The Company's remaining  operations  constitute a variety of specialty insurance
services,  each with unique  characteristics  and individually  insignificant to
consolidated revenues.

<TABLE>
<CAPTION>
                                                                 Three Months Ended                  Nine Months Ended
                                                                   September 30                         September 30
                                                                   ------------                         ---------

                                                              2001             2000              2001               2000
                                                              ----             ----              ----               ----
<S>                                                       <C>               <C>               <C>                <C>
Revenues
--------
Insurance company operation                                $8,888,656       $7,575,195        $25,899,191        $23,684,535

Other insurance operations                                  4,442,261        4,198,046         13,244,423         12,635,953
Intersegment elimination (1)                               (2,806,712)      (2,519,790)        (8,330,554)        (7,457,631)
                                                            ---------        ---------          ---------          ---------
   Total other insurance operations                         1,635,549        1,678,256          4,913,869          5,178,322
                                                            ---------        ---------          ---------          ---------

     Total Revenues                                       $10,524,205       $9,253,451        $30,813,060        $28,862,857
                                                           ==========        =========         ==========         ==========

Income (Loss) Before Income Taxes
---------------------------------
Insurance company operation                               $(5,587,410)        $(47,421)       $(7,895,095)        $1,334,340
Other insurance operations                                    277,608          173,526            838,042            428,550
                                                            ---------          -------          ---------          ---------
   Total Income (Loss) Before Income Taxes                $(5,309,802)        $126,105        $(7,057,053)        $1,762,890
                                                            =========          =======          =========          =========

</TABLE>


                                       7
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 5 - SEGMENT REPORTING (continued)
--------------------------------------
                                                      As of September 30
                                                      ------------------
                                                    2001               2000
                                                    ----               ----
Assets
Insurance company operation                     $107,924,575       $104,723,107
Intersegment eliminations (2)                     (1,605,532)          (397,339)
                                                 -----------        -----------
     Total insurance company operation           106,319,043        104,325,768
Other insurance operations                        18,985,714         14,820,077
                                                 -----------        -----------
     Total Assets                               $125,304,757       $119,145,845
                                                 ===========        ===========

(1) Intersegment  revenue  eliminations  reflect  commission paid by Crusader to
    Unifax  Insurance  Systems,  Inc.,  ("Unifax") a wholly owned  subsidiary of
    the Company.
(2) Intersegment asset eliminations reflect the elimination of Crusader
    receivables and Unifax payables.




ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

(a)  Liquidity and Capital Resources:
------------------------------------
Due to the nature of the Company's business  (insurance and insurance  services)
and whereas Company growth does not normally require  material  reinvestments of
profits into  property or equipment,  the cash flow  generated  from  operations
usually results in improved liquidity for the Company.

Crusader  generates a significant  amount of cash as a result of its holdings of
unearned  premium  reserves,  reserves  for loss  payments,  and its capital and
surplus.  Crusader's  loss and loss  adjustment  expense  payments  are the most
significant cash flow requirement of the Company. These payments are continually
monitored  and  projected to ensure that the Company has the  liquidity to cover
these payments  without the need to liquidate its  investments.  As of September
30, 2001,  the Company had cash and  investments  of  $95,255,590  (at amortized
cost) of which $92,392,389 (97%) were investments of Crusader.

As of the quarter ended September 30, 2001, the Company had invested $92,195,438
(at amortized cost) or 97% of its invested assets in fixed maturity obligations.
In  accordance  with  Statement  of  Financial   Accounting  Standard  No.  115,
Accounting for Certain Investments in Debt and Equity Securities, the Company is
required to classify its  investments in debt and equity  securities into one of
three categories:  held-to-maturity,  available-for-sale  or trading securities.
Although all of the Company's investments are classified as  available-for-sale,
the Company's investment guidelines place primary emphasis on buying and holding
high-quality investments.

The Company's  investments  in fixed maturity  obligations  of  $92,195,438  (at
amortized cost) include  $11,780,331  (13%) of pre-refunded  state and municipal
tax-exempt bonds, $6,118,244 (7%) of U.S. treasury securities, $73,896,863 (80%)
of high-quality industrial and miscellaneous bonds, and $400,000 of certificates
of deposit.  The tax-exempt interest income earned for the three and nine months
ended  September  30,  2001,  was  $170,962  and  $625,191,   respectively.  The
tax-exempt  interest income earned for the three and nine months ended September
30, 2000, was $289,585 and $930,266, respectively.

The  balance  of  the  Company's   investments  are  in  equity  securities  and
high-quality,  short-term  investments  that include a U.S.  treasury bill, bank
money  market  accounts,   certificates  of  deposit,  commercial  paper  and  a
short-term treasury money market fund.


                                       8
<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------

(a)  Liquidity and Capital Resources (continued):
------------------------------------------------
The  Company's  investment  policy  limits  investments  in any one  company  to
$2,000,000.  This limitation  excludes bond premiums paid in excess of par value
and  U.S.  government  or  U.S.  government  guaranteed  issues.  The  Company's
investment   guidelines  on  equity   securities  limit  investments  in  equity
securities  to  an  aggregate  maximum  of  $2,000,000.  All  of  the  Company's
investments  are  high-grade   investment  quality,   all  state  and  municipal
tax-exempt  fixed  maturity   investments  are  pre-refunded   issues,  and  all
certificates of deposits are FDIC insured.

The Company has previously  announced that its Board of Directors had authorized
the  repurchase  in the open market from time to time of up to an  aggregate  of
945,000  shares of the common stock of the Company (See Note 3). During the nine
months ended  September  30, 2001,  the Company  retired an aggregate of 240,358
shares of its common stock at a cost of  $1,387,398.  Of this  amount,  $432,047
came  from  cash on hand and the  proceeds  from the  maturities  of  short-term
investments,  and $955,351  from the proceeds of the sale of US Treasury  notes.
758  shares  of the  common  stock of the  Company,  at a cost of  $4,211,  were
repurchased in the three months ended September 30, 2001.

Although  material capital  expenditures may also be funded through  borrowings,
the Company  believes that its cash and short-term  investments at year end, net
of trust restriction of $1,832,392,  statutory  deposits of $2,725,000,  and the
dividend  restriction  between  Crusader and Unico plus the cash to be generated
from operations,  should be sufficient to meet its operating requirements during
the next twelve months without the necessity of borrowing funds.

The Company has completed its upgrade and  replacement of computer  systems at a
cost of  approximately  $150,000.  There are no other material  commitments  for
capital expenditures as of the date of this report.

City of Los Angeles Business License
------------------------------------
On September 13, 2000,  the City of Los Angeles  audited  Unico (parent  company
only) for the years 1997, 1998 and 1999 with respect to its Los Angeles business
license gross  receipts  tax. The audit  resulted in an assessment of $97,681 in
gross receipts tax, interest of $24,196, and penalties of $39,072,  resulting in
a total amount  claimed due of $160,949.  The assessment was based on the city's
position  that expenses of Unico's  subsidiaries  that are paid by Unico (parent
company) are subject to the gross receipts  business tax when those expenses are
reimbursed by the  subsidiaries to Unico.  The Company  disagreed with the audit
findings and appealed the matter.  A formal hearing was held on January 3, 2001.
The Company  received  the  decision  of the board of review that  resulted in a
revised gross receipts tax of $46,589 and a reduction in the interest assessment
by $13,500. The Company is awaiting a decision on its request that all penalties
be waived.  As of September  30, 2001,  the Company has expensed the revised tax
due and recorded the interest expense adjustment.


(b)  Results of Operations:
--------------------------
All comparisons  made in this discussion are comparing the three and nine months
ended September 30, 2001, to the three and nine months ended September 30, 2000,
unless otherwise indicated.

The Company had a net loss of $3,508,550  for the three months ending  September
30,  2001,  compared  to net  income  of  $155,430  for the three  months  ended
September 30, 2000 a decrease in net income of  $3,663,980.  For the nine months
ended September 30, 2001, the Company had a net loss $4,553,171, compared to net
income of $1,402,511 for the nine months ended September 30, 2000, a decrease in
net income of $5,955,682.  Total  revenues  increased  $1,270,754  (14%) for the
three months and $1,950,203  (7%) for the nine months ended  September 30, 2001,
when compared to the three and nine months ended September 30, 2000.

Premium written before  reinsurance  increased  $951,386 (11%) to $9,397,916 for
the three months and  increased  $2,893,571  (12%) to  $27,888,765  for the nine
months ended  September  30,  2001,  compared to the three and nine months ended
September 30, 2000. Although the Company attempts to be competitive on price, it
believes that maintaining adequate rates on the insurance policies it sells is a
better business  strategy than increasing  total written premium by selling more
policies at inadequate  rates.  The Company  believes that the growth in written
premium  in the  current  quarter  and year to date  periods  is the result of a
continued subsidence in the intensity of price-based competition in the property
casualty  insurance  market.  The Company cannot determine how long the existing
market conditions will continue, nor in which direction they might change.


                                       9
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------

The increase in written  premium in California  accounted for $925,011  (97%) of
the  total  increase  in the  three  months  and  $2,333,197  (81%) of the total
increase in the nine months ended September 30, 2001. Crusader's written premium
by state is as follows:

<TABLE>
<CAPTION>

                                Three Months Ended September 30                      Nine Months Ended September 30
                                -------------------------------                      ------------------------------
                                                           Increase                                             Increase
                              2001             2000       (Decrease)             2001             2000         (Decrease)
                              ----             ----        --------              ----             ----          --------
<S>                        <C>             <C>             <C>               <C>              <C>              <C>

 California                $8,300,859      $7,375,848      $925,011          $23,834,087      $21,500,890      $2,333,197
 Ohio                         268,826         205,523        63,303              965,172          510,860         454,312
 Arizona                      198,166         253,954       (55,788)             831,948          935,004        (103,056)
 Pennsylvania                 122,986         116,978         6,008              522,992          464,455          58,537
 Washington                   169,494         215,380       (45,886)             464,572          608,195        (143,623)
 Montana                      125,112         116,421         8,691              433,704          373,088          60,616
 Oregon                        77,325         105,254       (27,929)             319,773          383,677         (63,904)
 Texas                         64,623          19,503        45,120              297,638          128,651         168,987
 Nevada                        48,722           7,801        40,921              176,525           47,925         128,600
 Kentucky                      16,902          16,503           399               21,746           24,682          (2,936)
 Idaho                          4,901          13,365        (8,464)              20,608           17,767           2,841
                            ---------       ---------       -------           ----------       ----------       ---------
      Total                $9,397,916      $8,446,530      $951,386          $27,888,765      $24,995,194      $2,893,571
                            =========       =========       =======           ==========       ==========       =========
</TABLE>

PREMIUM EARNED before reinsurance increased $788,198 (10%) to $9,014,402 for the
three months and increased  $1,567,366  (6%) to $26,004,015  for the nine months
ended September 30, 2001,  compared to the three and nine months ended September
30,  2000.  The  increase  in earned  premium is a direct  result of the related
increase in written premium previously discussed.

PREMIUM CEDED  decreased  $613,230  (29%) to $1,523,605 for the three months and
$796,853  (16%) to  $4,294,094  for the nine months  ended  September  30, 2001,
compared to the three and nine months ended  September 30, 2000.  Earned premium
ceded  consists of both premium  ceded under the Company's  current  reinsurance
contracts  and premium ceded to the Company's  provisionally  rated  reinsurance
contracts. The decrease in ceded premium is primarily the result of the decrease
in  premium  ceded by the  Company  under its  provisionally  rated  reinsurance
contract.  Premium  ceded  under the  provisionally  rated  contract,  which was
canceled on a runoff basis effective December 31, 1997, is subject to adjustment
based on the amount of losses ceded, limited by a maximum percentage that can be
charged by the  reinsurer.  The change in premium  ceded between the quarter and
year-to-date periods is as follows:

                                           Three Months           Nine Months
                                               Ended                Ended
                                         September 30,2001    September 30, 2001
                                         -----------------    ------------------

Increase in ceded premium (excluding
  provisionally rated premium ceded)          $ 82,355            $ 167,826
(Decrease) in provisionally rated
  premium ceded                               (695,585)            (964,679)
                                               -------              -------
    Net (decrease) in ceded premium          $(613,230)           $(796,853)
                                               =======              =======

NET INVESTMENT INCOME,  excluding realized investment gains,  decreased $104,471
(7%) to $1,425,943  for the three months and $244,386 (5%) to $4,324,742 for the
nine  months  ended  September  30,  2001,  compared  to  investment  income  of
$1,530,414  for the  three  months  and  $4,569,128  for the nine  months  ended
September  30, 2000.  The decrease in  investment  income is primarily  due to a
decrease in invested  assets due to the cost of the  repurchase of the Company's
common stock and a general lowering of yields on new and reinvested  assets. The
Company has funded the common stock repurchase from cash on hand, the maturities
of short-term investments and the proceeds of the sale of US treasury bonds.

The Company continually evaluates the recoverability of its investment holdings.
When a decline in value of fixed  maturities or equity  securities is considered
other than  temporary,  a loss is  recognized in the  consolidated  statement of
operations. During the quarter ended March 31, 2001, the Company realized a loss
of $23,520 on one equity security where a decline in market value was considered
other than temporary. There was no realized loss recognized in the quarter ended
September 30, 2001.


                                       10
<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------

GROSS  COMMISSION  AND FEE INCOME  decreased  $7,395 (1%) to $1,375,654  for the
three months and decreased $142,656 (3%) to $4,124,453 for the nine months ended
September  30, 2001,  compared to the three and nine months ended  September 30,
2000. The decrease for the three and nine months consisted of the following:

                                          Three Months           Nine Months
                                             Ended                  Ended
                                       September 30, 2001     September 30, 2001
                                       ------------------     ------------------

Service fee income                         $ 29,725               $ 45,528
Other commission and fee income                 832                 16,058
Workers' compensation program                 3,952                (21,984)
Health and life insurance program           (16,072)               (37,701)
Daily automobile rental insurance program:
  Excluding contingent commission           (25,832)               (84,723)
  Contingent commission                           -                (59,834)
                                             ------                 ------
     Net (decrease) in commission
       and fee income                       $(7,395)             $(142,656)
                                              =====                =======

Due to intense price competition, written premium in the daily automobile rental
insurance  program  has  decreased  approximately  14% for the three  months and
approximately 15% for the nine months ended September 30, 2001. This decrease in
written  premium  has  resulted  in a  decrease  in  commission  and fee  income
(excluding  contingent  commission)  of $25,832 for the three months and $84,723
for the nine months ended September 30, 2001. To avoid  underwriting  losses for
the  non-affiliated  insurance  company it represents,  the Company continues to
produce  business  only at rates that it  believes to be  adequate.  The Company
cannot determine how long the existing market  conditions will continue,  nor in
which direction they might change.

LOSSES AND LOSS  ADJUSTMENT  EXPENSES  were 155% of net  premium  earned for the
three months and 117% of net premium earned for the nine months ended  September
30, 2001,  compared to 83% of net premium earned for the three months and 76% of
net earned premium for the nine months ended  September 30, 2000.  This increase
was  primarily  due  to an  increase  in  incurred  losses  of  prior  years  of
approximately   $6,222,000  (adverse   development)  in  the  three  months  and
$10,099,000  (adverse  development) in the nine months ended September 30, 2001,
compared  to an increase  in  incurred  losses of prior  years of  approximately
$1,096,000 (adverse development) in the three months and an increase in incurred
losses for prior years of approximately  $2,170,000 (adverse development) in the
nine months ended September 30, 2000.

The Company's incurred losses and loss adjustment expenses for the quarter ended
September  30,  2001,  continued  to  be  negatively  impacted  by  higher  than
anticipated  claim cost from  business  outside of  California  (primarily  from
liquor liability claims occurring in 1999), and from continued losses due to the
impact of changes in California  case law that  expanded  coverage and increased
loss exposure  (primarily on construction  defect claims for losses occurring in
or prior  to the  Company's  revision  of its  policy  forms  in  1995).  Liquor
liability  claims arise from the liability of tavern owners  related to the sale
of alcoholic beverages.  The Company was also negatively impacted in the quarter
ended September 30, 2001, by claim settlements on its apartment house program in
excess of the amounts previously estimated.

In the quarter ended  September 30, 2001, the Company  increased its estimate of
ultimate losses for both reported and unreported claims primarily occurring from
1998  through  2000 and from 1993  through  1995 (the  years  most  impacted  by
construction defect claims). The Company believes that this action appropriately
addresses the adverse loss  development  trend discussed  above. The Company has
also taken various  underwriting and pricing actions that it believes  addresses
the underlying causes of the adverse  development on the  non-California  liquor
liability and apartment  house  programs.  The foregoing  statements are forward
looking statements and involve risks and uncertainties  which could cause actual
results to differ  materially  from these forward  looking  statements.  Factors
which could cause actual  results to differ  materially  include  actual  versus
estimated  claim  experience,  underwriting  actions not being  effective,  rate
increases for coverage not being sufficient, and changes in the law.

POLICY ACQUISITION COSTS consist of commissions, premium taxes, inspection fees,
and certain other  underwriting  costs,  which are related to the  production of
Crusader  insurance  policies.  These costs include both  Crusader  expenses and
allocated  expenses  of other  Unico  subsidiaries.  Crusader's  reinsurers  pay
Crusader  a  ceding  commission,  which  is  primarily  a  reimbursement  of the
acquisition cost related to the ceded premium.  Policy acquisition costs, net of
ceding  commission,  are  deferred  and  amortized  as the related  premiums are
earned.


                                       11
<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------

These costs were 30% of net premium  earned for the three  months and 29% of net
earned premium for the nine months ended September 30, 2001,  compared to 34% of
net premium  earned for the three  months and 32% of net premium  earned for the
nine months ended September 30, 2000.

SALARIES AND EMPLOYEE  BENEFITS  decreased  $14,809 (1%) to  $1,052,922  for the
three months and increased  $35,618 (1%) to $3,283,212 for the nine months ended
September 30, 2001,  compared to salary and employee  benefits of $1,067,731 for
the three months and $3,247,594 for the nine months ended September 30, 2000.

COMMISSIONS TO  AGENTS/BROKERS  decreased $26,214 (8%) to $304,355 for the three
months  and  decreased  $43,192  (4%) to  $944,172  for the  nine  months  ended
September  30, 2001,  compared to the three and nine months ended  September 30,
2000.

OTHER OPERATING EXPENSES increased $30,469 (5%) for the three months and $13,643
(1%) for the nine months ended  September  30,  2001,  compared to the three and
nine months  ended  September  30,  2000.  The  increase in the three months was
primarily due an increase in legal fees of $19,353 related to general  corporate
matters.

INCOME TAX  PROVISION  provided a benefit of  $1,801,252  (34% of income  before
taxes) for the three months and a benefit of  $2,503,882  (35% of income  before
taxes) for the nine months  ended  September  30,  2001,  compared to income tax
benefit of $29,325 (23% of income  before  taxes) in the three months and income
tax expense of $360,379  (20% of income  before  taxes) in the nine months ended
September  30,  2000.  This  change  was  primarily  due to a  pre-tax  loss  of
$5,309,802  (including  tax exempt  investment  income of $145,319) in the three
months and a pre-tax loss of $7,057,053  (including tax exempt investment income
of $531,413) in the nine months ended  September  30, 2001,  compared to pre-tax
income of $126,105  (including tax exempt  investment income of $246,147) in the
three months and pre-tax income of $1,762,890  (including tax exempt  investment
income of $790,726) in the nine months ended September 30, 2000.

The effect of inflation  on net income of the Company  during the three and nine
months ended  September 30, 2001, and the three and nine months ended  September
30, 2000, was not significant.


Forward Looking Statements
--------------------------
Certain   statements   contained   herein,   including   the  section   entitled
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"   that  are  not  historical  facts  are  forward  looking.   These
statements,  which may be identified by forward-looking words or phrases such as
"anticipate,"  "believe,"  "expect,"  "intend,"  "may,"  "should,"  and "would,"
involve  risks and  uncertainties,  many of which are beyond the  control of the
Company.  Such risks and  uncertainties  could  cause  actual  results to differ
materially  from these  forward-looking  statements.  Factors  which could cause
actual  results to differ  materially  include  underwriting  actions  not being
effective,  rate  increases  for coverages  not being  sufficient,  premium rate
adequacy  relating to competition or regulation,  actual versus  estimated claim
experience,  regulatory changes or developments,  unforeseen calamities, general
market conditions,  the Company's ability to introduce new profitable  products,
and the Company's ability to expand geographically.


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------
The  Company's  consolidated  balance  sheet  includes a  substantial  amount of
invested  assets whose fair values are subject to various  market risk exposures
including interest rate risk and equity price risk.

The Company's invested assets consist of the following:

<TABLE>
<CAPTION>
                                                               September 30        December 31          Increase
                                                                   2001               2000             (Decrease)
                                                                   ----               ----              --------
<S>                                                            <C>                 <C>                <C>
Fixed maturity bonds (at amortized value)                      $91,795,438         $94,398,077        $(2,602,639)
Short-term cash investments (at cost)                            2,987,946           3,355,354           (367,408)
Equity securities (at cost)                                          2,400              25,920            (23,520)
Certificates of deposit (over 1 year, at cost)                     400,000             400,000                   -
                                                                ----------          ----------          ---------
     Total invested assets                                     $95,185,784         $98,179,351        $(2,993,567)
                                                                ==========          ==========          =========
</TABLE>

There have been no material changes in the composition of the Company's invested
assets or market risk exposures since the end of the preceding fiscal year end.


                                       12
<PAGE>


PART II - OTHER INFORMATION


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

(a)   Exhibits: None

(b)   Reports on Form 8-K:
      None.





                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned there unto authorized.


                                             UNICO AMERICAN CORPORATION



Date: November 12, 2001   By:   /s/ Erwin Cheldin
                                -----------------
                                Erwin Cheldin
                                Chairman of the Board, President and Chief
                                Executive Officer, (Principal Executive Officer)



Date: November 12, 2001   By:   /s/ Lester A. Aaron
                                -------------------
                                Lester A. Aaron
                                Treasurer, Chief Financial Officer, (Principal
                                Accounting and Principal Financial Officer)



                                       13
<PAGE>