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 January 1, 2001 to March 31, 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

                                    5,453,219
         Number of shares of common stock outstanding as of May 11, 2001


                                       1
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

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

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                           March 31              December 31
                                                                                             2001                    2000
                                                                                             ----                    ----

<S>                                                                                      <C>                    <C>
ASSETS
------
Investments
   Available for sale:
      Fixed maturities, at market value (amortized cost:  March 31,
         2001  $93,292,723; December 31, 2000  $94,798,077)                               $95,004,262            $94,982,630

      Equity securities at market (cost: March 31, 2001
         $2,400; December 31, 2000  $25,920)                                                    2,400                 25,920
   Short-term investments, at cost                                                          3,314,217              3,355,354
                                                                                           ----------             ----------
      Total Investments                                                                    98,320,879             98,363,904
Cash                                                                                          166,824                 54,806
Accrued investment income                                                                   1,528,265              1,908,547
Premiums and notes receivable, net                                                          5,797,833              5,807,731
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                                   673,259                393,198
   Unpaid losses and loss adjustment expenses                                               8,555,399             10,671,343
Prepaid reinsurance premiums                                                                   39,674                 29,531
Deferred policy acquisition costs                                                           4,615,163              4,500,147
Property and equipment (net of accumulated depreciation)                                      258,280                114,107
Deferred income taxes                                                                         228,964                948,442
Other assets                                                                                1,447,965              1,154,064
                                                                                          -----------            -----------
     Total Assets                                                                        $121,632,505           $123,945,820
                                                                                          ===========            ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
-----------
Unpaid losses and loss adjustment expenses                                                $41,283,546            $45,217,369
Unearned premiums                                                                          17,666,077             17,099,927
Advance premium and premium deposits                                                        2,385,567              2,316,016
Accrued expenses and other liabilities                                                      9,207,257              7,899,179
Dividends payable                                                                             272,661                      -
                                                                                           ----------             ----------
    Total Liabilities                                                                     $70,815,108            $72,532,491
                                                                                           ----------             ----------

STOCKHOLDERS' EQUITY
---------------------
Common stock, no par - authorized 10,000,000 shares; issued and outstanding
   shares 5,453,219 at March 31, 2001, and 5,692,699 at December 31, 2000                  $2,686,493             $2,789,494
Accumulated other comprehensive income                                                      1,129,616                121,805
Retained earnings                                                                          47,001,288             48,502,030
                                                                                           ----------             ----------
  Total Stockholders' Equity                                                              $50,817,397            $51,413,329
                                                                                           ----------             ----------

  Total Liabilities and Stockholders' Equity                                             $121,632,505           $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 March 31
                                                                                              ---------------------------
                                                                                              2001                 2000
                                                                                              ----                 ----
<S>                                                                                        <C>                   <C>
REVENUES
--------
Insurance Company Revenues
     Premium earned                                                                        $8,309,286            $8,116,552
     Premium ceded                                                                          1,676,823             1,339,506
                                                                                            ---------             ---------
          Net premium earned                                                                6,632,463             6,777,046
     Net investment income                                                                  1,409,016             1,431,490
     Net realized investment (losses)                                                         (23,520)                    -
     Other income                                                                               3,020                 5,035
                                                                                            ---------             ---------
          Total Insurance Company Revenues                                                  8,020,979             8,213,571

Other Revenues from Insurance Operations
     Gross commissions and fees                                                             1,360,767             1,414,352
     Investment income                                                                         58,318                92,667
     Finance charges and late fees earned                                                     204,793               207,134
     Other income                                                                               3,011                 1,562
                                                                                            ---------             ---------
          Total Revenues                                                                    9,647,868             9,929,286
                                                                                            ---------             ---------

EXPENSES
--------
Losses and loss adjustment expenses                                                         5,465,895             4,950,539
Policy acquisition costs                                                                    2,028,239             2,103,351
Salaries and employee benefits                                                              1,113,705             1,081,561
Commissions to agents/brokers                                                                 323,007               333,128
Other operating expenses                                                                      728,857               632,392
                                                                                            ---------             ---------
          Total Expenses                                                                    9,659,703             9,100,971
                                                                                            ---------             ---------

Income Before Taxes                                                                           (11,835)              828,315
Income Tax Provision                                                                          (63,939)              193,306
                                                                                               ------               -------
          Net Income                                                                          $52,104              $635,009
                                                                                               ======               =======



PER SHARE DATA
--------------
Basic Shares Outstanding                                                                    5,648,380             6,304,965
Basic Earnings Per Share                                                                        $0.01                 $0.10

Diluted Shares Outstanding                                                                  5,677,436             6,348,793
Diluted Earnings Per Share                                                                      $0.01                 $0.10

</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 March 31
                                                                                              2001                2000
                                                                                              ----                ----

<S>                                                                                       <C>                    <C>
Net income                                                                                   $52,104             $635,009
Other changes in comprehensive income net of tax:
   Unrealized gains (losses) on securities classified as available-for-sale
      arising during the period (tax impact: 2001, $511,179; 2000, $(107,530))               992,288             (208,736)
   Reclassification adjustment for losses included in net income (tax impact:
      2001, $7,997; 2000, $0)                                                                 15,523                    -
                                                                                           ---------              -------
          Comprehensive Income                                                            $1,059,915             $426,273
                                                                                           =========              =======
</TABLE>

            See notes to unaudited consolidated financial statements


                                       4

<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                       FOR THE THREE MONTHS ENDED MARCH 31

<TABLE>
<CAPTION>

                                                                                           2001                  2000
                                                                                           ----                  ----
<S>                                                                                    <C>                   <C>
Cash Flows from Operating Activities
   Net income                                                                             $52,104              $635,009
   Adjustments to reconcile net income to net cash from operations
      Depreciation and amortization                                                        21,658                15,647
      Bond amortization, net                                                               98,127               150,779
      Net realized loss on sale of securities                                              23,520                     -
   Changes in assets and liabilities
      Premium, notes and investment income receivable                                     390,180               114,101
      Reinsurance recoverable                                                           1,835,883            (2,096,735)
      Prepaid reinsurance premiums                                                        (10,143)                2,756
      Deferred policy acquisitions costs                                                 (115,016)              (64,997)
      Other assets                                                                       (293,899)              139,846
      Reserve for unpaid losses and loss adjustment expenses                           (3,933,823)              587,748
      Unearned premium reserve                                                            566,150               154,662
      Advance premium and premium deposits                                                 69,551                (7,473)
      Accrued expenses and other liabilities                                              352,728 *            (620,414)
      Income taxes current/deferred                                                       200,302                55,130
                                                                                          -------               -------
          Net Cash (Used) from Operations                                                (742,678)             (933,941)
                                                                                          -------               -------

Investing Activities
     Purchase of fixed maturity investments                                            (2,642,850)           (1,954,140)
     Proceeds from maturity of fixed maturity investments                               4,040,000             2,735,600
     Net increase in short-term investments                                                51,213               286,541
     Additions to property and equipment                                                 (165,831)               (6,537)
                                                                                        ---------             ---------
          Net Cash Provided by Investing Activities                                     1,282,532             1,061,464
                                                                                        ---------             ---------

Financing Activities
     Repurchase of common stock                                                          (427,836) *                  -
                                                                                          -------
          Net Cash Used by Financing Activities                                          (427,836)                    -

Net Increase in Cash                                                                      112,018               127,523
Cash at beginning of period                                                                54,806               105,439
                                                                                           ------               -------
          Cash at End of Period                                                          $166,824              $232,962
                                                                                          =======               =======

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


* Does not include $955,351 due on repurchase of common stock settling April 2, 2001.

</TABLE>

            See notes to unaudited consolidated financial statements


                                       5
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 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  months  ended  March  31,  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 March 31, 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
March 31,  2001,  there were  options  covering  110,000  shares of common stock
outstanding  under this plan, of which options  covering 42,500 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 quarter  ended
March 31, 2001, the Company retired an aggregate of 239,600 shares of its common
stock at a cost of  $1,383,187  of which  $103,001 was  allocated to capital and
$1,280,186 was allocated to retained earnings. As of March 31, 2001, the Company
had purchased and retired an aggregate of 868,200 shares of its common stock.

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 March 31, 2001 and 2000:


                                       6
<PAGE>
                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001


                                                     Three Months Ended March 31
                                                     ---------------------------
                                                     2001                  2000
                                                     ----                  ----
Basic Earnings Per Share
------------------------
Net income numerator                               $52,104              $635,009

Weighted average shares outstanding denominator  5,648,380             6,304,965

     Per share amount                                $0.01                 $0.10


Diluted Earnings Per Share
--------------------------
Net income numerator                               $52,104              $635,009

Weighted average shares outstanding              5,648,380             6,304,965
Effect of diluted securities                        29,056                43,828
                                                 ---------             ---------
Diluted shares outstanding denominator           5,677,436             6,348,793
                                                 ---------             ---------

     Per share amount                                $0.01                 $0.10


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  beginning  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  comprise  83%  of
consolidated  revenues.  The Company's remaining operations constitute a variety
of  specialty   insurance  services,   each  with  unique   characteristics  and
individually insignificant to consolidated revenues.

                                                  Three Months Ended March 31
                                                  ---------------------------
                                                  2001                  2000
                                                  ----                  ----
Revenues
--------
Insurance company operation                    $8,020,979            $8,213,571

Other insurance operations                      4,277,853             4,183,349
Intersegment elimination (1)                   (2,650,964)           (2,467,634)
                                                ---------             ---------
   Total other insurance operations             1,626,889             1,715,715
                                                ---------             ---------

     Total Revenues                            $9,647,868            $9,929,286
                                                =========             =========

Income (Loss) Before Income Taxes
---------------------------------
Insurance company operation                     $(173,296)             $750,517
Other insurance operations                        161,461                77,798
                                                   ------               -------
     Total Income (Loss) Before Income Taxes    $ (11,835)             $828,315
                                                   ======               =======

Assets
------
Insurance company operation                  $105,456,436          $101,776,571
Intersegment eliminations (2)                  (1,312,089)             (162,406)
                                              -----------           -----------
     Total insurance company operation        104,144,347           101,614,165
Other insurance operations                     17,488,158            20,905,387
                                              -----------           -----------
     Total Assets                            $121,632,505          $122,519,552
                                              ===========           ===========


(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.


                                       7
<PAGE>

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 March 31,
2001, the Company had cash and cash  investments  of  $96,776,164  (at amortized
cost) of which $89,409,687 (92%) were investments of Crusader.

As of the quarter ended March 31, 2001, the Company had invested $93,292,723 (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  $93,292,723  (at
amortized cost) include  $17,684,089  (19%) of pre-refunded  state and municipal
tax-exempt bonds, $7,986,572 (9%) of U.S. treasury securities, $67,222,062 (72%)
of high-quality industrial and miscellaneous bonds, and $400,000 of certificates
of deposit.  The  tax-exempt  interest  income earned for the three months ended
March 31, 2001 and 2000 was $233,163 and $332,395, 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.

On March 1, 2001, the Board of Directors  declared a five-cent ($0.05) per share
cash dividend payable on May 18, 2001, to shareholders of record at the close of
business on April 27, 2001.

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
quarter ended March 31, 2001, the Company retired an aggregate of 239,600 shares
of its common stock at a cost of $1,383,187.  Of this amount, $427,836 came from
cash on hand and the proceeds from the maturities of short-term investments, and
$955,351  (which  settled on April 2, 2001 with the  proceeds  of the sale of US
Treasury notes) is included in accrued expenses and other liabilities.

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 $2,797,729,  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 initiated an upgrade and replacement of computer systems and has
spent  approximately  $140,000 of an estimated cost of $150,000 to complete this
project.  The Company  expects the project to be completed by December 31, 2001.
There are no other material  commitments for capital expenditures as of the date
of this report.


                                       8
<PAGE>

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 has appealed  the matter.  A formal  hearing was held on January 3,
2001 that resulted in a reduction in the gross  receipts tax due from $97,681 to
$32,636.  The Company has also  requested  that all penalties be waived and that
interest be adjusted to reflect the  decrease in tax due. As of March 31,  2001,
the Company has expensed the revised tax due.


(b) Results of Operations:
-------------------------
All  comparisons  made in this  discussion are comparing the quarter ended March
31, 2001, to the quarter ended March 31, 2000, unless otherwise indicated.

The  Company's  net income  for the  quarter  ended  March 31,  2001,  decreased
$582,905  (92%) to $52,104  compared to $635,009 for the quarter ended March 31,
2000. Revenues for the quarter ended March 31, 2001,  decreased $281,418 (3%) to
$9,647,868, compared to $9,929,286 for the quarter ended March 31, 2000.

PREMIUM WRITTEN before reinsurance increased $604,222 (7%) to $8,875,435 for the
quarter ended March 31, 2001, compared to the three months ended March 31, 2000.
The Company  believes that the growth in written  premium in the current quarter
is the  result  of a  continued  subsidence  in  the  intensity  of  price-based
competition in the property casualty  insurance market.  The increase in written
premium in California accounted for $438,730 (73%) of this increase.  Crusader's
written premium by state is as follows:

                                 Three Months Ended March 31           Increase
          State                    2001               2000            (Decrease)
          -----                    ----               ----             --------

          California           $7,490,151          $7,051,421          $438,730
          Ohio                    311,151             116,146           195,005
          Arizona                 280,631             360,498           (79,867)
          Pennsylvania            243,777             217,153            26,624
          Texas                   162,656              49,065           113,591
          Oregon                  133,036             149,629           (16,593)
          Montana                 116,275              81,222            35,053
          Washington              115,474             216,419          (100,945)
          Nevada                   12,595              22,573            (9,978)
          Idaho                     9,689                   -             9,689
          Kentucky                      -               7,087            (7,087)
                                ---------           ---------           -------
               Total           $8,875,435          $8,271,213          $604,222
                                =========           =========           =======


PREMIUM EARNED before reinsurance increased $192,734 (2%) to $8,309,286 for the
quarter ended March 31, 2001, compared to $8,116,552 for the quarter ended March
31, 2000. The Company writes annual policies and therefore earns written premium
over the one-year policy term.


PREMIUM CEDED increased $337,317 (25%) to $1,676,823 for the quarter ended March
31, 2001, compared to $1,339,506 for the quarter ended March 31, 2000. The ratio
of earned  premium ceded to earned  premium  increased to 20% of earned  premium
from 17% of earned  premium in the quarter ended March 31, 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
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 ended
March 31, 2001 and 2000 is as follows:

  Increase in ceded premium ceded under current reinsurance contracts    $22,264
  Increase in provisionally rated premium ceded                          315,053
                                                                         -------
      Net increase in premium ceded                                     $337,317
                                                                         =======


                                       9
<PAGE>

INVESTMENT INCOME,  excluding realized investment losses, decreased $56,823 (4%)
to $1,467,334  for the quarter ended March 31, 2001,  compared to $1,524,157 for
the quarter ended March 31, 2000. The decrease in investment income is primarily
due to a 3% decrease in average  invested  assets for the quarter  ending  March
31,2001, compared to the prior year.

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.


COMMISSION AND FEE INCOME  decreased  $53,585 (4%) to $1,360,767  for the  three
months ended March 31, 2001,  compared to the three months ended March 31, 2000.
This decrease consisted of the following:

       Other commission and fee income                     $   4,122
       Service fee income                                     (9,100)
       Workers' compensation program                         (12,731)
       Health and life insurance program                     (13,859)
       Daily automobile rental insurance program             (22,017)
                                                              ------
          Net decrease in commission and fee income         $(53,585)
                                                              ======


LOSSES AND LOSS ADJUSTMENT EXPENSES were $5,465,895 or 82% of net premium earned
for the quarter  ended March 31,  2001,  compared  to  $4,950,539  or 73% of net
premium earned for the quarter ended March 31, 2000. This increase was primarily
due to an increase in incurred losses of prior years of  approximately  $885,000
(adverse  development)  in the  quarter  ended  March 31,  2001,  compared to an
increase in incurred losses of prior years of  approximately  $503,000  (adverse
development) in the quarter ended March 31, 2000.

The  Company's  incurred  losses and loss  adjustment  expenses  continued to be
negatively  impacted by higher than anticipated claim cost from business outside
of California (principally from liquor liability exposure and longer statutes of
limitation),  the effect on settlements of escalating jury awards, and continued
losses due to the impact of changes in California law that expanded coverage and
increased loss exposure (Montrose Chemical Corp. v. Admiral Insurance Co. (1995)
and Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. (1996)).


POLICY ACQUISITION COSTS consist of commissions, premium taxes, inspection fees,
and  certain  other  underwriting  costs,  which  are  directly  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 31% of net premium  earned for both the quarter  ended
March 31, 2001, and for the quarter ended March 31, 2000.


SALARIES AND EMPLOYEE BENEFITS  increased  $32,144 (3%) to  $1,113,705  for  the
quarter ended March 31, 2001,  compared to $1,081,561for the quarter ended March
31, 2000.


COMMISSIONS TO AGENTS/BROKERS  decreased $10,121 (3%) to $323,007 in the quarter
ended March 31, 2001, compared to the quarter ended March 31, 2000.


OTHER OPERATING EXPENSES increased $96,465 (15%) during the quarter ended  March
31,  2001,  compared  to the quarter  ended March 31,  2000.  The  increase  was
primarily the result of increased  advertising  expenses of $28,642, an increase
in legal expenses of $24,555 and increase in general office expenses of $31,064.


INCOME TAX PROVISION  provided a benefit of $63,939 for the quarter ended  March
31,  2001,  compared  to income tax expense of  $193,306  (23% of income  before
taxes) in the quarter  ended March 31, 2000.  This change was primarily due to a
pre tax loss of $11,835  (including tax exempt investment income of $198,188) in
the  quarter  ended  March  31,  2001,  compared  to pretax  income of  $828,315
(including tax exempt  investment income of $282,535) in the quarter ended March
31, 2000.


The effect of  inflation  on net income of the Company  during the three  months
ended March 31, 2001, and 2000 was not significant.


                                       10
<PAGE>

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 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:

                                                     March 31        December 31
                                                       2001             2000
                                                       ----             ----

Fixed maturity bonds (at amortized value)          $92,892,723       $94,398,077
Short-term cash investments (at cost)                3,314,217         3,355,354
Equity securities (at cost)                              2,400            25,920
Certificates of deposit (over 1 year, at cost)         400,000           400,000
                                                    ----------        ----------
     Total invested assets                         $96,609,340       $98,179,351
                                                    ==========        ==========

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 2 - CHANGES IN SECURITIES
------------------------------
(c)   None


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
(a)   Exhibits: None

(b)   Reports on Form 8-K:
      None



                                       11
<PAGE>



                                   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:   May 11, 2001       By:  /s/  ERWIN CHELDIN
                                ------------------
                                Erwin Cheldin
                                Chairman of the Board, President and Chief
                                Executive Officer, (Principal Executive Officer)



Date:   May 11, 2001       By:  /s/ LESTER A. AARON
                                -------------------
                                Lester A. Aaron
                                Treasurer, Chief Financial Officer, (Principal
                                Accounting and Principal Financial Officer)


                                       12