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, 2000 to September 30, 2000

                           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

                                    5,749,899
       Number of shares of common stock outstanding as of November 9, 2000


                                       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
                                                                                               2000                  1999
                                                                                               ----                  ----
<S>                                                                                       <C>                   <C>

ASSETS
------
Investments
   Available for sale:
      Fixed maturities, at market value (amortized cost:  September 30,
         2000  $97,202,470;  December 31, 1999  $99,142,275)                               $96,319,837           $97,594,134
      Equity securities at market (cost: September 30, 2000
         $164,170;  December 31, 1999  $164,170)                                                46,080                66,000
   Short-term investments, at cost                                                           2,929,137             5,968,173
                                                                                            ----------           -----------
      Total Investments                                                                     99,295,054           103,628,307
Cash                                                                                           182,777               105,439
Accrued investment income                                                                    1,688,298             2,060,471
Premiums and notes receivable, net                                                           5,774,923             5,496,890
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                                    671,908                19,850
   Unpaid losses and loss adjustment expenses                                                5,198,935             3,964,324
Prepaid reinsurance premiums                                                                    32,417                32,438
Deferred policy acquisition costs                                                            4,509,685             4,338,217
Property and equipment (net of accumulated depreciation)                                       124,869               148,667
Deferred income taxes                                                                        1,240,662             1,541,242
Other assets                                                                                   426,317               642,911
                                                                                           -----------           -----------
     Total Assets                                                                         $119,145,845          $121,978,756
                                                                                           ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
-----------
Unpaid losses and loss adjustment expenses                                                 $39,591,195           $41,592,489
Unearned premiums                                                                           17,141,688            16,583,143
Advance premium and premium deposits                                                         2,374,874             2,571,190
Reinsurance payable                                                                          5,734,571             4,644,621
Accrued expenses and other liabilities                                                       2,364,565             1,746,516
                                                                                            ----------            ----------
    Total Liabilities                                                                      $67,206,893           $67,137,959
                                                                                            ----------            ----------

STOCKHOLDERS'  EQUITY
---------------------
Common stock,  no par - authorized  10,000,000  shares;  issued and  outstanding
   shares 5,733,565 at September 30, 2000, and 6,304,953 at December 31, 1999              $ 2,817,591          $  3,098,389
Accumulated other comprehensive (loss)                                                        (660,477)           (1,086,565)
Retained earnings                                                                           49,781,838            52,828,973
                                                                                            ----------            ----------
  Total Stockholders' Equity                                                               $51,938,952           $54,840,797
                                                                                            ----------            ----------

  Total Liabilities and Stockholders' Equity                                              $119,145,845          $121,978,756
                                                                                           ===========           ===========
</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
                                                             ------------                        ------------
                                                          2000           1999                2000            1999
                                                          ----           ----                ----            ----
<S>                                                    <C>            <C>                 <C>             <C>


REVENUES
--------
Insurance Company Revenues

     Premium earned                                    $8,226,204     $8,606,924          $24,436,649     $26,256,814
     Premium ceded                                      2,136,835      2,265,845            5,090,947       5,482,002
                                                        ---------      ---------           ----------      ----------
          Net premium earned                            6,089,369      6,341,079           19,345,702      20,774,812
     Investment income                                  1,451,540      1,439,237            4,294,899       4,257,017
     Net realized investment gains                              -          5,633                    -          64,793
     Other income                                          34,286            256               43,934             628
                                                        ---------      ---------           ----------      ----------
          Total Insurance Company Revenues              7,575,195      7,786,205           23,684,535      25,097,250

Other Revenues from Insurance Operations

     Gross commissions and fees                         1,383,049      1,462,969            4,267,109       4,235,672
     Investment income                                     78,874         63,434              274,229         202,644
     Net realized investment gains                          2,508              -                2,508               -
     Finance charges and late fees earned                 209,423        229,492              625,455         690,359
     Other income                                           4,402          1,528                9,021          10,167
                                                        ---------      ---------           ----------      ----------
          Total Revenues                                9,253,451      9,543,628           28,862,857      30,236,092
                                                        ---------      ---------           ----------      ----------

EXPENSES
--------
Losses and loss adjustment expenses                     5,054,246      3,972,201           14,744,673      11,450,352
Policy acquisition costs                                2,098,883      2,062,228            6,205,450       6,336,141
Salaries and employee benefits                          1,067,731      1,097,561            3,247,594       3,235,432
Commissions to agents/brokers                             330,569        327,904              987,364         968,551
Other operating expenses                                  575,917        610,538            1,914,886       1,889,414
                                                        ---------      ---------           ----------      ----------
     Total Expenses                                     9,127,346      8,070,432           27,099,967      23,879,890
                                                        ---------      ---------           ----------      ----------

Income Before Taxes                                       126,105      1,473,196            1,762,890       6,356,202
Income Tax Provision                                      (29,325)       415,554              360,379       1,831,670
                                                         --------     ---------             ---------       ---------
     Net Income                                         $ 155,430     $1,057,642           $1,402,511      $4,524,532
                                                          =======      =========            =========       =========



PER SHARE DATA
--------------
Basic Shares Outstanding                                5,923,682      6,304,953           6,166,220       6,255,774
Basic Earnings Per Share                                    $0.03          $0.17               $0.23           $0.72

Diluted Shares Outstanding                              5,972,337      6,367,661           6,211,027       6,359,146
Diluted Earnings Per Share                                  $0.03          $0.17               $0.23           $0.71

</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
                                                             ------------                         ------------
                                                          2000          1999                  2000            1999
                                                          -----         ----                  ----            ----

<S>                                                      <C>          <C>                  <C>             <C>
Net income                                               $155,430     $1,057,642           $1,402,511      $4,524,532
Other changes in comprehensive income net of tax:
     Unrealized gains (losses) on securities
        classified as available-for-sale arising
        during the period                                 615,760       (373,582)             426,088      (2,332,372)
     Less: reclassification adjustment for
        (losses) included in net income                         -              -                   -          (20,097)
                                                          -------       --------            ---------       ---------
            Comprehensive Income                         $771,190       $684,060           $1,828,599      $2,172,063
                                                          =======        =======            =========       =========
</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>

                                                                                   2000                  1999
                                                                                   ----                  ----
<S>                                                                             <C>                  <C>
Cash Flows from Operating Activities:
   Net Income                                                                   $1,402,511            $4,524,532
   Adjustments to reconcile net income to net cash from operations:
      Depreciation and amortization                                                 49,184                66,048
      Bond amortization, net                                                       412,056               524,756
      Net realized (gain) on sale of securities                                     (2,508)              (64,793)
   Changes in assets and liabilities:
      Premium, notes and investment income receivable                               94,140                62,017
      Reinsurance recoverable                                                   (1,886,669)           (1,427,342)
      Prepaid reinsurance premiums                                                      21               (13,264)
      Deferred policy acquisitions costs                                          (171,468)              172,516
      Other assets                                                                 216,594               181,653
      Reserve for unpaid losses and loss adjustment expenses                    (2,001,294)           (2,540,438)
      Unearned premium reserve                                                     558,545              (790,097)
      Funds held as security and advanced premiums                                (196,316)              121,270
      Reinsurance payable                                                        1,089,950             1,485,966
      Accrued expenses and other liabilities                                       618,049               (46,217)
      Income taxes current/deferred                                                 81,080               265,292
                                                                                   -------             ---------
          Net Cash Provided from Operations                                        263,875             2,521,899
                                                                                   -------             ---------

Investing Activities:
     Purchase of fixed maturity investments                                     (8,703,237)          (11,342,604)
     Proceeds from maturity of fixed maturity investments                       10,201,450             7,839,250
     Purchase of equity securities - cost                                                -            (3,758,378)
     Proceeds from sale of equity securities                                             -             4,162,504
     Net decrease in short-term investments                                      3,071,080             1,885,470
     Additions to property and equipment                                           (25,386)              (27,812)
                                                                                 ---------             ---------
          Net Cash Provided (Used) by Investing Activities                       4,543,907            (1,241,570)
                                                                                 ---------             ---------

Financing Activities:
     Proceeds from issuance of common stock                                              -               202,687
     Repurchase of common stock                                                 (3,784,934)                    -
     Dividends paid to shareholders                                               (945,510)           (1,576,239)
                                                                                 ----------            ----------
          Net Cash (Used) by Financing Activities                               (4,730,444)           (1,373,552)
                                                                                 ---------             ----------

Net increase (decrease) in cash                                                     77,338               (93,223)
Cash at beginning of period                                                        105,439               277,544
                                                                                   -------               -------
          Cash at End of Period                                                   $182,777              $184,321
                                                                                   =======               =======

Supplemental Cash Flow Information Cash paid during the period for:

          Interest                                                                    $  -                $1,492
          Income taxes                                                            $210,025            $1,725,000
</TABLE>


            See notes to unaudited consolidated financial statements.


                                       5
<PAGE>
                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
Nature of Business
------------------
Unico American Corporation ("Unico") is an insurance holding company.  Unico and
its  subsidiaries  (the  "Company"),  all of which are  wholly  owned,  provides
primarily in California,  property,  casualty,  health and life  insurance,  and
related premium financing.

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,  2000,  are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2000.  Quarterly financial statements should be read in conjunction
with the financial  statements  and related  notes in the Company's  1999 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, 2000,
there were 101,415 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, 2000, there were 132,500 options  outstanding  under this plan and
50,000 of these options are currently exercisable.

NOTE 3 - 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, 2000 and 1999,  and for the nine months ended
September 30, 2000 and 1999:

<TABLE>
<CAPTION>
                                                            Three Months Ended              Nine Months Ended
                                                               September 30                    September 30
                                                               ------------                    ------------
                                                            2000         1999               2000          1999
                                                            ----         ----               ----          ----
<S>                                                      <C>          <C>                <C>            <C>

Basic Earnings Per Share

Net income numerator                                      $155,430    $1,057,642         $1,402,511     $4,524,532
                                                           =======     =========          =========      =========

Weighted average shares outstanding denominator          5,923,682     6,304,953          6,166,220      6,255,774
                                                         =========     =========          =========      =========

     Basic Earnings Per Share                                $0.03         $0.17              $0.23          $0.72
</TABLE>


                                       6

<PAGE>
                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000

NOTE 3 - EARNINGS PER SHARE (continued)
--------------------------------------
<TABLE>
<CAPTION>
                                                            Three Months Ended               Nine Months Ended
                                                               September 30                     September 30
                                                               -----------                      ------------
                                                            2000          1999              2000           1999
                                                            ----          ----              ----           ----
<S>                                                      <C>          <C>                <C>            <C>
Diluted Earnings Per Share
--------------------------
Net income numerator                                      $155,430    $1,057,642         $1,402,511     $4,524,532
                                                           =======     =========          =========      =========

Weighted average shares outstanding                      5,923,682     6,304,953          6,166,220      6,255,774
Effect of diluted securities                                48,655        62,708             44,807        103,372
                                                         ---------      --------           --------      ---------
Diluted shares outstanding denominator                   5,972,337     6,367,661          6,211,027      6,359,146
                                                         =========     =========          =========      =========

     Diluted Earnings Per Share                              $0.03         $0.17              $0.23          $0.71
</TABLE>


NOTE 4 - 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  82%  of
consolidated  revenues for the three and nine months ended  September  30, 2000,
82% of revenues  for the three  months and 83% of  revenues  for the nine months
ended  September  30, 1999.  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
                                                               ------------                   ------------
                                                            2000         1999               2000          1999
                                                            ----         ----               ----          ----
<S>                                                     <C>           <C>              <C>            <C>
Revenues
--------
Insurance company operation                             $7,575,195    $7,786,205        $23,684,535     25,097,250

Other insurance operations                               4,198,046     4,230,042         12,635,953     12,750,287
Intersegment elimination (1)                            (2,519,790)   (2,472,619)        (7,457,631)    (7,611,445)
                                                         ---------     ---------          ---------      ---------
   Total other insurance operations                      1,678,256     1,757,423          5,178,322      5,138,842
                                                         ---------     ---------          ---------      ---------

     Total Revenues                                     $9,253,451    $9,543,628        $28,862,857    $30,236,092
                                                         =========     =========         ==========     ==========

Income  Before Income Taxes
---------------------------
Insurance company operation                               $(47,421)   $1,299,567         $1,334,340     $6,029,732
Other insurance operations                                 173,526       173,629            428,550        326,470
                                                           -------     ---------         ----------      ---------
   Total Income Before Income Taxes                       $126,105    $1,473,196         $1,762,890     $6,356,202
                                                           =======     =========          =========      =========


                                                                                       September 30     December 31
                                                                                           2000            1999
                                                                                           ----            ----
Assets
------
Insurance company operation                                                            $104,723,107   $103,450,995
Intersegment eliminations (2)                                                              (397,339)      (479,933)
                                                                                        -----------    -----------
     Total insurance company operation                                                  104,325,768    102,971,062

Other insurance operations                                                               14,820,077     19,007,694
                                                                                        -----------    -----------

     Total Assets                                                                      $119,145,845   $121,978,756
                                                                                        ===========    ===========


(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.
</TABLE>


                                       7


<PAGE>
                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000


NOTE 5 - Repurchase of Common Stock - Effect on Stockholders' Equity
--------------------------------------------------------------------
In April 2000, the Company  announced that its Board of Directors had authorized
the  repurchase  in the open market from time to time of up to an  aggregate  of
315,000 shares of the common stock of the Company.  On August 8, 2000, the Board
of Directors  authorized the  repurchase of an additional  315,000 shares and on
September 6, 2000,  the Board of Directors  authorized the repurchase of another
315,000  shares of the common  stock of the Company in the open market from time
to time. This brings the total shares of the Company's  common stock  authorized
to be repurchased and retired to 945,000  shares.  As of September 30, 2000, the
Company had purchased  and retired an aggregate of 571,400  shares of its common
stock at a cost of  $3,784,934  of which  $280,798 was  allocated to capital and
$3,504,136 was allocated to retained earnings.

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 historically  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, 2000,  the Company had cash and  investments of  $100,478,554  (at
amortized cost) of which $95,484,721 (95%) were investments of Crusader.

As of the quarter ended September 30, 2000, the Company had invested $97,202,470
(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  $97,202,470  (at
amortized cost) include  $22,171,977  (23%) of pre-refunded  state and municipal
tax-exempt bonds, $9,015,691 (9%) of U.S. treasury securities, $65,614,802 (68%)
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,  2000,  was  $289,585  and  $930,266,   respectively.  The
tax-exempt  interest income earned for the three and nine months ended September
30, 1999, was $345,940 and $1,124,231, 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.

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.


                                       8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
------------------------

In April 2000, the Company  announced that its Board of Directors had authorized
the  repurchase  in the open market from time to time of up to an  aggregate  of
315,000 shares of the common stock of the Company.  On August 8, 2000, the Board
of Directors  authorized the  repurchase of an additional  315,000 shares and on
September 6, 2000,  the Board of Directors  authorized the repurchase of another
315,000  shares of the common  stock of the Company in the open market from time
to time. This brings the total shares of the Company's  common stock  authorized
to be repurchased and retired to 945,000  shares.  As of September 30, 2000, the
Company had purchased  and retired an aggregate of 571,400  shares of its common
stock at a cost of $3,784,934.  These shares were purchased  using  cash-on-hand
and the proceeds from the maturities of short-term investments.

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 $2,896,447,  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.

State of Washington Regulatory Proceeding
-----------------------------------------
In August 1999 the Insurance  Commissioner of the State of Washington  announced
that she would seek to impose a $307,000 fine,  seek repayment of policy service
fees to Washington policyholders including interest at the rate of 12% per annum
(estimated  to be  approximately  $780,000 plus interest to November 5, 2000, of
$360,000),  seek payment of all back premium  taxes owed on the subject  service
fees including appropriate penalties required for delinquent taxes (estimated to
be  approximately  $16,000  plus  penalties),  and  seek to  suspend  Crusader's
Certificate  of Authority to do business in the state of Washington for a period
of 120 days. The Insurance  Commissioner  alleged that a service fee of $250 per
policy,  which was  charged  by a  Washington  agent  after the  Company  became
admitted  in the state of  Washington,  is premium  and  subject to rate  filing
requirements  and  premium  taxes.  This  service  fee was first  charged by the
Washington  agent under his broker's license in 1992, when the Company began its
operation in Washington as a non-admitted insurer. The Company believes that the
nature  of the  service  fee did not  change  in 1995  when the  Company  became
admitted in  Washington  and  believes  that the service fee  continued  to be a
broker fee and is not subject to rate filing requirements or premium taxes.

Crusader commenced pursuit of its legal remedies,  starting with a demand for an
administrative  hearing. That administrative  hearing ended on February 7, 2000.
On  May  5,  2000,  the  administrative  hearing  officer,  an  employee  of the
Washington  Commissioner's Office, rendered her decision against the Company and
ordered that all of the sanctions previously stated be imposed. The order states
that the  $307,000  fine be paid on or before  August 5, 2000;  that  refunds to
policyholders  be completed by November 5, 2000;  that all back premium taxes on
the subject  service fees be paid on or before May 5, 2001; and that  Crusader's
Certificate  of Authority to do business in the state of Washington be suspended
from May 20, 2000,  through  September  17, 2000.  The Company and the Insurance
Commissioner  agreed to a stay of the administrative  hearing officer's decision
pending the outcome of the Company's  appeal in the superior court for the state
of Washington.  Premium  written in the state of Washington was $215,380 for the
three  months and $608,195 for the nine months  ended  September  30, 2000.  The
Company does not believe it has done anything improper and does not believe that
the  outcome  of this  matter  will  have a  materially  adverse  effect  on its
financial  statements.  No accruals  have been made in the  September  30, 2000,
financial statements for the sanctions described above; however, the Company has
accrued  $30,000 that it estimates is the remaining  amount it will incur in the
legal and administrative cost of the appeal.

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, plus
interest of $24,196,  plus penalty of $39,072, for a total 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  disagrees  with the audit  findings  and has  appealed  the
matter.  A hearing is expected to take place in December  2000.  As of September
30, 2000, the Company has accrued  $25,000 that it estimates will cover the cost
of the appeal and an estimate of the gross receipts tax,  penalty,  and interest
that may ultimately become due based on the information currently available.


                                       9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
-------------------------

Year 2000
---------
Subsequent to December 31, 1999, the Company has not experienced adverse effects
as a result of Year 2000  issues  from  either  internal  or  external  sources.
However,  due to the  unusual  nature  of the  problem  and  lack of  historical
experience  with Year 2000 issues,  it is difficult to predict with certainty if
there may be other computer or infrastructure problems that may occur and affect
the Company and its customers or suppliers. Due to the fact that the Company has
not experienced any adverse effects of Year 2000 issues through the date of this
report, the Company does not anticipate it will be adversely materially affected
by any future Year 2000 events from its internal  operations or from others with
whom the Company directly or indirectly does business.

Although there are no material  commitments  for capital  expenditures as of the
date of this report,  the Company  anticipates that it will spend  approximately
$150,000 out of working  capital on upgrading and  replacing its computers  over
the next twelve months.

b)  Results of Operations:
--------------------------
All comparisons  made in this discussion are comparing the three and nine months
ended September 30, 2000, to the three and nine months ended September 30, 1999,
unless otherwise indicated.

The  Company's  net income  decreased  $902,212  (85%) to $155,430 for the three
months and $3,122,021  (69%) to $1,402,511  for the nine months ended  September
30,  2000,  compared  to net  income  of  $1,057,642  for the three  months  and
$4,524,532  for the  nine  months  ended  September  30,  1999.  Total  revenues
decreased  $290,177 (3%) for the three months and  $1,373,235  (5%) for the nine
months  ended  September  30, 2000,  when  compared to the three and nine months
ended September 30, 1999.

PREMIUM EARNED before reinsurance  decreased $380,720 (4%) to $8,226,204 for the
three months and decreased  $1,820,165  (7%) to $24,436,649  for the nine months
ended September 30, 2000,  compared to the three and nine months ended September
30, 1999.  Intense price  competition that has effected previous periods appears
to have  bottomed out in the quarter  ended  September 30, 2000, as reflected by
the slight  growth in written  premium  during the quarter as  described  below.
Although  the Company  attempts to be  competitive  on price,  it believes  that
maintaining adequate rates is a better business strategy than increasing premium
writings at inadequate rates.

PREMIUM CEDED  decreased  $129,010  (6%) to $2,136,835  for the three months and
$391,055  (7%) to  $5,090,947,  for the nine months  ended  September  30, 2000,
compared to the three and nine months ended September 30, 1999.  Although earned
premium ceded  decreased,  the ratio of earned  premium ceded to earned  premium
remained   approximately   26%  for  the  comparable  three  month  periods  and
approximately  21% for the comparable  nine month periods.  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  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, 2000   September 30, 2000
                                         ------------------   ------------------
(Decrease) in ceded premium (excluding
   provisionally rated premium ceded)        $(113,073)           $(401,082)
Increase (decrease) in provisionally
   rated premium ceded                        ( 15,937)              10,027
                                               -------              -------
   Net decrease in ceded premium             $(129,010)           $(391,055)
                                               =======              =======

PREMIUM WRITTEN before reinsurance increased $173,052 (2%) to $8,446,530 for the
three months and  decreased  $471,523  (2%) to  $24,995,194  for the nine months
ended September 30, 2000,  compared to the three and nine months ended September
30, 1999.


                                       10
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
-------------------------

Crusader's written premium by state is as follows:
<TABLE>
<CAPTION>

                        Three Months Ended September 30                      Nine Months Ended September 30
                        -------------------------------                      ------------------------------
                                                   Increase                                              Increase
                      2000            1999        (Decrease)             2000             1999          (Decrease)
                      ----            ----         --------              ----             ----           --------
<S>                <C>             <C>             <C>               <C>              <C>               <C>
 California        $7,375,848      $7,139,128      $236,720          $21,500,890      $21,931,544       $(430,654)
 Arizona              253,954         230,150        23,804              935,004          791,597         143,407
 Washington           215,380         272,990       (57,610)             608,195          734,330        (126,135)
 Ohio                 205,523         156,710        48,813              510,860          403,759         107,101
 Pennsylvania         116,978          92,189        24,789              464,455          502,655         (38,200)
 Oregon               105,254         193,675       (88,421)             383,677          583,302        (199,625)
 Montana              116,421         127,943       (11,522)             373,088          345,634          27,454
 Texas                 19,503          16,408         3,095              128,651           92,143          36,508
 Nevada                 7,801           9,278        (1,477)              47,925           18,730          29,195
 Kentucky              16,503          35,007       (18,504)              24,682           63,023         (38,341)
 Idaho                 13,365               -        13,365               17,767                           17,767
                    ---------      ----------       -------           ----------       ----------         -------
      Total        $8,446,530      $8,273,478      $173,052          $24,995,194      $25,466,717       $(471,523)
                    =========       =========       =======           ==========       ==========         =======
</TABLE>


NET INVESTMENT INCOME,  excluding realized  investment gains,  increased $27,743
(2%) to $1,530,414  for the three months and $109,467 (2%) to $4,569,128 for the
nine  months  ended  September  30,  2000,  compared  to  investment  income  of
$1,502,671  for the  three  months  and  $4,459,661  for the nine  months  ended
September 30, 1999.  Although  average fixed  maturity (at amortized  value) and
short-term investments decreased 4%, the mix of the taxable and tax-exempt fixed
maturity investments  changed.  Tax-exempt  securities,  which generally carry a
lower yield than  taxable  securities,  decreased to  $22,171,977  (23% of fixed
maturities)  at  September  30,  2000,  compared  to  $28,198,842  (28% of fixed
maturities) as of September 30,1999.

GROSS  COMMISSION  AND FEE INCOME  decreased  $79,920 (5%) to $1,383,049 for the
three months and increased  $31,437 (1%) to $4,267,109 for the nine months ended
September  30, 2000,  compared to the three and nine months ended  September 30,
1999.  The decrease for the three and increase for the nine months  consisted of
the following:

                                    Three Months Ended         Nine Months Ended
                                    September 30, 2000        September 30, 2000
                                    ------------------        ------------------
Workers' compensation program            $  8,002                  $(28,689)
Other commission and fee income             7,361                    32,216
Daily automobile rental insurance
    program                                (9,213)                   49,008
Service fee income                        (12,876)                  (14,433)
Health and life insurance program         (73,194)                   (6,665)
                                           ------                     -----
   Increase (decrease) in commission
     and fee income                      $(79,920)                  $31,437
                                           ======                    ======

The  decrease  in gross  commission  and fee  income  from the  health  and life
insurance program for the three months ended September 30, 2000, compared to the
three months ended September 30, 1999, was primarily due to the recognition of a
$95,000 bonus commission in the three month ended September 30, 1999.  Excluding
the effect of this bonus commission,  total commission and fee income would have
increased  $15,080  (1%) for the three  months  and  $126,437  (3%) for the nine
months when compared to the comparable periods of the prior year.

LOSSES AND LOSS ADJUSTMENT EXPENSES were 83% of net premium earned for the three
and 76% of net premium  earned for the nine months  ended  September  30,  2000,
compared to 63% for the three months and 55% for the nine months ended September
30, 1999.  This  increase was  primarily due to an increase in prior year losses
(adverse  development)  of  approximately  $1,096,000  in the three  months  and
$2,170,000 in the nine months ended September 30, 2000,  compared to a reduction
in prior period losses (favorable  development) of approximately $149,000 in the
three months and approximately $2,053,000 in the nine months ended September 30,
1999.

Although  the  methodology  used by the  Company  in  determining  case and IBNR
reserves  during  the  three  and nine  months  ended  September  30,  2000,  is
consistent with prior years, the Company has not reduced its IBNR reserves as it
did in previous  years due to  uncertainty  resulting  from various  settlements
and/or  verdicts in excess of case reserves which  occurred  during 1999 and the
three and nine months ended September 30, 2000.


                                       11
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS (continued)
-------------------------

POLICY ACQUISITION COSTS consist of commissions, premium taxes, inspection fees,
and  certain  other  underwriting  costs that 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.  These costs were 34% of net premium earned for the three months and 32%
for the nine months ended  September  30,  2000,  compared to 33% of net premium
earned for the three  months and 30% of net  premium  earned for the nine months
ended September 30, 1999.

SALARIES AND EMPLOYEE  BENEFITS  decreased  $29,830 (3%) to  $1,067,731  for the
three months and increased  $12,162 (0%) to $3,247,594 for the nine months ended
September 30, 2000,  compared to salary and employee  benefits of $1,097,561 for
the three months and $3,235,432 for the nine months ended September 30, 1999.

COMMISSIONS TO  AGENTS/BROKERS  increased  $2,665 (1%) to $330,569 for the three
months  and  increased  $18,813  (2%) to  $987,364  for the  nine  months  ended
September  30, 2000,  compared to the three and nine months ended  September 30,
1999.

OTHER  OPERATING  EXPENSES  decreased  $34,621  (6%) for the  three  months  and
increased $25,472 (1%) for the nine months ended September 30, 2000, compared to
the three and nine months ended September 30, 1999.

INCOME TAX PROVISION provided a benefit of $29,325, (23%) of income before taxes
in the three  months and  decreased  to 20% of income  before taxes for the nine
months ended  September 30, 2000,  compared to 28% of income before taxes in the
three months and 29% in the nine months ended  September  30, 1999.  This change
was  primarily  due both to the decrease in taxable  income in the current three
month period and to tax-exempt  interest  income which  comprised 195% of income
before taxes in the three months and 45% in the nine months ended  September 30,
2000,  compared  to 20% in the three  months  and 15% in the nine  months  ended
September 30, 1999.

EARNINGS PER SHARE were effected by the reduction in the weighted average shares
outstanding  for the three month period from  6,304,953 to 5,923,682 and for the
nine month  period from  6,255,774  to  6,166,220  primarily  as a result of the
Company's  repurchase of its  outstanding  common stock which is described under
"Liquidity and Capital Resources."

The effect of inflation  on net income of the Company  during the three and nine
months ended  September 30, 2000, and the three and nine months ended  September
30, 1999, 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,"  "appears,"  "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  continuation  of  intense  price
competition, 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,  the  outcome  of the state of  Washington
proceedings,  the  outcome  of the  appeal of the City of Los  Angeles  business
license assessment, and the Company's ability to expand geographically.


                                       12
<PAGE>
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
                                                   2000                 1999            (Decrease)
                                                   ----                 ----             --------
<S>                                            <C>                  <C>                <C>
Fixed maturity bonds (at amortized value)       $96,802,470          $98,942,275       $(2,139,805)
Short-term cash investments (at cost)             2,929,137            5,968,173        (3,039,036)
Equity securities (at cost)                         164,170              164,170                 -
Certificates of deposit (over 1 year, at cost)      400,000              200,000           200,000
                                                -----------          -----------         ---------

     Total invested assets                     $100,295,777         $105,274,618       $(4,978,841)
                                                ===========          ===========         ==========
</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.


PART II - OTHER INFORMATION

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:
-------------------------------------------------------
      Exhibit 27 - Financial Data Schedule.

(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 10, 2000   By:   /s/ Erwin Cheldin
                                -------------
                                Erwin Cheldin
                                Chairman of the Board, President and Chief
                                Executive Officer, (Principal Executive Officer)

Date: November 10, 2000   By:   /s/ Lester A. Aaron
                                ---------------
                                Lester A. Aaron
                                Treasurer, Chief Financial Officer, (Principal
                                Accounting and Principal Financial Officer)



                                       13