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 April 1, 2001 to June 30, 2001

                           Commission File No. 0-3978


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

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

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

                                 (818) 591-9800
                          Registrant's telephone number

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

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

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

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

                                   5,453,219
       Number of shares of common stock outstanding as of August 10, 2001



                                       1
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

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

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

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

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

ASSETS
------
Investments
   Available for sale:
      Fixed maturities, at market value (amortized cost:  June 30,
         2001  $91,867,642;  December 31, 2000  $94,798,077)                               $93,204,140           $94,982,630
      Equity securities at market (cost: June 30, 2001
         $2,400;  December 31, 2000  $25,920)                                                    2,400                25,920
   Short-term investments, at cost                                                           3,125,120             3,355,354
                                                                                            ----------            ----------
      Total Investments                                                                     96,331,660            98,363,904
Cash                                                                                           115,399                54,806
Accrued investment income                                                                    1,772,075             1,908,547
Premiums and notes receivable, net                                                           6,235,577             5,807,731
Reinsurance recoverable:
   Paid losses and loss adjustment expenses                                                    972,141               393,198
   Unpaid losses and loss adjustment expenses                                               10,464,858            10,671,343
Prepaid reinsurance premiums                                                                    62,323                29,531
Deferred policy acquisition costs                                                            4,813,375             4,500,147
Property and equipment (net of accumulated depreciation)                                       258,028               114,107
Deferred income taxes                                                                          431,726               948,442
Other assets                                                                                 1,917,326             1,154,064
                                                                                           -----------           -----------
     Total Assets                                                                         $123,374,488          $123,945,820
                                                                                           ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
-----------
Unpaid losses and loss adjustment expenses                                                 $45,614,076           $45,217,369
Unearned premiums                                                                           18,601,164            17,099,927
Advance premium and premium deposits                                                         2,381,993             2,316,016
Income taxes payable                                                                             4,123                     -
Accrued expenses and other liabilities                                                       7,299,959             7,899,179
                                                                                            ----------            ----------
    Total Liabilities                                                                      $73,901,315           $72,532,491
                                                                                            ----------            ----------

STOCKHOLDERS' EQUITY
---------------------
Common stock, no par - authorized 10,000,000 shares; issued and outstanding
   shares 5,453,219 at June 30, 2001, and 5,692,699 at December 31, 2000                  $  2,671,750          $  2,789,494
Accumulated other comprehensive income                                                         882,089               121,805
Retained earnings                                                                           45,919,334            48,502,030
                                                                                            ----------            ----------
  Total Stockholders' Equity                                                               $49,473,173           $51,413,329
                                                                                            ----------            ----------

  Total Liabilities and Stockholders' Equity                                              $123,374,488          $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                     Six Months Ended
                                                                    June 30                              June 30
                                                              ------------------                     ----------------
                                                             2001                2000               2001            2000
                                                             ----                ----               ----            ----
<S>                                                      <C>                  <C>               <C>              <C>

REVENUES
--------
Insurance Company Revenues
     Premium earned                                       $8,680,327          $8,093,893        $16,989,613      $16,210,445
     Premium ceded                                         1,093,666           1,614,606          2,770,489        2,954,112
                                                           ---------           ---------         ----------       ----------
          Net premium earned                               7,586,661           6,479,287         14,219,124       13,256,333
     Net investment income                                 1,391,162           1,411,869          2,800,178        2,843,359
     Net realized investment (losses)                              -                   -            (23,520)               -
     Other income                                             11,733               4,613             14,753            9,648
                                                           ---------           ---------         ----------       ----------
          Total Insurance Company Revenues                 8,989,556           7,895,769         17,010,535       16,109,340

Other Revenues from Insurance Operations
     Gross commissions and fees                            1,388,032           1,469,708          2,748,799        2,884,060
     Investment income                                        40,303             102,688             98,621          195,355
     Net realized investment gains                             3,212                   -              3,212                -
     Finance charges and late fees earned                    216,414             208,898            421,207          416,032
     Other income                                              3,470               3,057              6,481            4,619
                                                          ----------           ---------         ----------       ----------
          Total Revenues                                  10,640,987           9,680,120         20,288,855       19,609,406
                                                          ==========           =========         ==========       ==========

EXPENSES
--------
Losses and loss adjustment expenses                        8,210,872           4,739,888         13,676,767        9,690,427
Policy acquisition costs                                   2,138,850           2,003,216          4,167,089        4,106,567
Salaries and employee benefits                             1,116,585           1,098,302          2,230,290        2,179,863
Commissions to agents/brokers                                316,810             323,667            639,817          656,795
Other operating expenses                                     593,286             706,577          1,322,143        1,338,969
                                                          ----------           ---------         ----------       ----------
     Total Expenses                                       12,376,403           8,871,650         22,036,106       17,972,621
                                                          ----------           ---------         ----------       ----------

     Income (Loss) Before Taxes                           (1,735,416)            808,470         (1,747,251)       1,636,785
Income Tax Provision                                        (638,691)            196,398           (702,630)         389,704
                                                          ----------             -------          ---------        ---------
     Net Income (Loss)                                   $(1,096,725)          $ 612,072        $(1,044,621)      $1,247,081
                                                           =========             =======          =========        =========


PER SHARE DATA
--------------
Basic Shares Outstanding                                   5,453,219           6,270,012          5,550,799        6,287,488
Basic Earnings (Loss) Per Share                               $(0.20)              $0.10             $(0.19)           $0.20

Diluted Shares Outstanding                                 5,482,752           6,311,950          5,580,094        6,330,371
Diluted Earnings (Loss) Per Share                             $(0.20)              $0.10             $(0.19)           $0.20

</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                     Six Months Ended
                                                                         June 30                               June 30
                                                                         -------                               -------
                                                                  2001              2000                2001            2000
                                                                  ----              ----                ----            ----
<S>                                                           <C>                 <C>               <C>              <C>

Net income (loss)                                             $(1,096,725)        $612,072          $(1,044,621)     $1,247,081
Other changes in comprehensive income,
  net of tax:
     Unrealized gains (losses) on securities
        classified as available-for-sale arising
        during the period                                        (249,647)          19,064              746,880        (189,672)
     Less: reclassification adjustment for (gains)
        and losses included in net income                          (2,120)               -               13,403
                                                                ---------          -------              -------       ---------
            Comprehensive Income (loss)                       $(1,348,492)        $631,136            $(284,338)     $1,057,409
                                                                =========          =======              =======       =========

</TABLE>

            See notes to unaudited consolidated financial statements.


                                       4
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                        FOR THE SIX MONTHS ENDED JUNE 30,

<TABLE>
<CAPTION>

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

Cash Flows from Operating Activities:
   Net Income (Loss)                                                                   $(1,044,621)           $1,247,081
   Adjustments to reconcile net income to net cash from operations
      Depreciation and amortization                                                         45,511                31,473
      Bond amortization, net                                                               196,338               289,649
      Net realized loss on sale of securities                                               20,308                     -
   Changes in assets and liabilities
      Premium, notes and investment income receivable                                     (291,374)              (45,605)
      Reinsurance recoverable                                                             (372,458)           (1,048,588)
      Prepaid reinsurance premiums                                                         (32,792)              (10,797)
      Deferred policy acquisitions costs                                                  (313,228)             (149,806)
      Other assets                                                                        (763,263)              227,002
      Reserve for unpaid losses and loss adjustment expenses                               396,707            (1,926,253)
      Unearned premium reserve                                                           1,501,237               338,219
      Funds held as security and advanced premiums                                          65,977               (50,697)
      Accrued expenses and other liabilities                                              (599,220)              (36,419)
      Income taxes current/deferred                                                        129,179               106,573
                                                                                         ---------             ---------
          Net Cash  (Used) from Operations                                              (1,061,699)           (1,028,168)
                                                                                         ---------             ---------

Investing Activities
     Purchase of fixed maturity investments                                             (4,154,470)           (4,469,270)
     Proceeds from maturity of fixed maturity investments                                6,872,180             6,355,600
     Net decrease in short-term investments                                                249,833               763,854
     Additions to property and equipment                                                  (189,432)               (6,537)
                                                                                         ---------             ---------
          Net Cash Provided by Investing Activities                                      2,778,111             2,643,647
                                                                                         ---------             ---------

Financing Activities
     Repurchase of common stock                                                         (1,383,186)             (509,926)
     Dividends paid to shareholders                                                       (272,633)             (945,745)
                                                                                         ---------             ---------
          Net Cash  (Used) by Financing Activities                                      (1,655,819)           (1,455,671)
                                                                                         ---------             ---------

Net increase in cash                                                                        60,593               159,808
Cash at beginning of period                                                                 54,806               105,439
                                                                                           -------               -------
          Cash at End of Period                                                           $115,399              $265,247
                                                                                           =======               =======

Supplemental Cash Flow Information Cash paid during the period for:
          Interest                                                                           $  75                  $  -
          Income taxes                                                                     $10,000              $100,025

</TABLE>

            See notes to unaudited consolidated financial statements.


                                       5
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001



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

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

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

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

The Company's 1999 Omnibus Stock Plan also provides, among other things, for the
grant of  incentive  options to officers and key  employees.  The plan covers an
aggregate of 500,000 shares of the Company's common stock (subject to adjustment
in the case of stock splits, reverse stock splits, stock dividends, etc.). As of
June 30,  2001,  there were  options  covering  105,000  shares of common  stock
outstanding  under this plan.  Options covering 40,000 of these shares of common
stock were exercisable.

NOTE 3 - REPURCHASE OF COMMON STOCK - EFFECT ON STOCKHOLDERS' EQUITY
--------------------------------------------------------------------
The Company has previously  announced that its Board of Directors had authorized
the  repurchase  in the open market from time to time of up to an  aggregate  of
945,000  shares of the common stock of the Company.  During the six months ended
June 30, 2001, the Company  retired an aggregate of 239,600 shares of its common
stock at a cost of  $1,383,187  of which  $117,744 was  allocated to capital and
$1,265,443 was allocated to retained earnings.  As of June 30, 2001, the Company
had  purchased  and  retired  under  the Board of  Directors'  authorization  an
aggregate of 868,200 shares of its common stock at a cost of $5,513,255.


                                       6
<PAGE>
                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001


NOTE 4 - EARNINGS PER SHARE
---------------------------
The  following  table  represents  the  reconciliation  of  the  numerators  and
denominators of the Company's basic earnings per share and diluted  earnings per
share computations reported on the Consolidated Statements of Operations for the
three months ended June 30, 2001 and 2000, and for the six months ended June 30,
2001 and 2000:
<TABLE>
<CAPTION>
                                                                  Three Months Ended                 Six Months Ended
                                                                        June 30                           June 30
                                                                        -------                           -------
                                                                 2001            2000              2001               2000
                                                                 ----            ----              ----               ----
<S>                                                          <C>               <C>             <C>                 <C>
Basic Earnings (Loss) Per Share
-------------------------------
Net income (loss) numerator                                  $(1,096,725)       $612,072       $(1,044,621)        $1,247,081
                                                               =========         =======         =========          =========

Weighted average shares outstanding denominator                5,453,219       6,270,012         5,550,799          6,287,488
                                                               =========       =========         =========          =========

     Basic Earnings (Loss) Per Share                              $(0.20)          $0.10            $(0.19)             $0.20


Diluted Earnings (Loss) Per Share
---------------------------------
Net income (loss) numerator                                  $(1,096,725)       $612,072       $(1,044,621)        $1,247,081
                                                               =========         =======         =========          =========

Weighted average shares outstanding                            5,453,219       6,270,012         5,550,799          6,287,488
Effect of diluted securities                                      29,533          41,938            29,295             42,883
                                                               ---------       ---------         ---------          ---------
Diluted shares outstanding denominator                         5,482,752       6,311,950         5,580,094          6,330,371
                                                               =========       =========         =========          =========

     Diluted Earnings (Loss) Per Share                            $(0.20)          $0.10            $(0.19)             $0.20
</TABLE>


NOTE 5 - SEGMENT REPORTING
--------------------------
Statement of Financial Accounting Standards No. 131 (SFAS No. 131),  Disclosures
about Segments of an Enterprise and Related  Information,  became  effective for
fiscal  years  effective  after  December  15,  1997.  SFAS No. 131  establishes
standards  for the way  information  about  operating  segments  is  reported in
financial  statements.  The Company has adopted SFAS No. 131 and has  identified
its insurance company operation, Crusader Insurance Company ("Crusader"), as its
primary  reporting  segment.   Revenues  from  this  segment  comprised  84%  of
consolidated  revenues for the three and six months ended June 30, 2001, and 82%
of revenues for the three and the six months ended June 30, 2000.  The Company's
remaining operations constitute a variety of specialty insurance services,  each
with unique  characteristics  and  individually  insignificant  to  consolidated
revenues.
<TABLE>
<CAPTION>
                                                                Three Months Ended                   Six Months Ended
                                                                     June 30                              June 30
                                                                     -------                              -------
                                                               2001            2000               2001              2000
                                                               ----            ----               ----              ----
<S>                                                       <C>               <C>               <C>                <C>
Revenues
--------
Insurance company operation                                $8,989,556       $7,895,769        $17,010,535        $16,109,340

Other insurance operations                                  4,524,309        4,254,558          8,802,162          8,437,907
Intersegment elimination (1)                               (2,872,878)      (2,470,207)        (5,523,842)        (4,937,841)
                                                            ---------        ---------          ---------          ---------
 Total other insurance operations                           1,651,431        1,784,351          3,278,320          3,500,066
                                                            ---------        ---------          ---------          ---------

     Total Revenues                                       $10,640,987       $9,680,120        $20,288,855        $19,609,406
                                                           ==========        =========         ==========         ==========

Income  (Loss) Before Income Taxes
----------------------------------
Insurance company operation                               $(2,134,389)        $631,244        $(2,307,685)        $1,381,761
Other insurance operations                                    398,973          177,226            560,434            255,024
                                                            ---------          -------          ---------          ---------
   Total Income (Loss) Before Income Taxes                $(1,735,416)        $808,470        $(1,747,251)        $1,636,785
                                                            =========          =======          =========          =========
</TABLE>

                                       7
<PAGE>

                           UNICO AMERICAN CORPORATION
                                AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001


NOTE 5 - SEGMENT REPORTING (continued)
--------------------------------------
                                                          As of June 30
                                                          -------------
                                                    2001               2000
                                                    ----               ----
Assets
Insurance company operation                     $106,352,408       $103,136,569
Intersegment eliminations (2)                     (1,298,145)          (459,126)
                                                 -----------        -----------
     Total insurance company operation           105,054,263        102,677,443
Other insurance operations                        18,320,225         17,227,900
                                                 -----------        -----------
     Total Assets                               $123,374,488       $119,905,343
                                                 ===========        ===========


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



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

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

Crusader  generates a significant  amount of cash as a result of its holdings of
unearned  premium  reserves,  reserves  for loss  payments,  and its capital and
surplus.  Crusader's  loss and loss  adjustment  expense  payments  are the most
significant cash flow requirement of the Company. These payments are continually
monitored  and  projected to ensure that the Company has the  liquidity to cover
these  payments  without the need to liquidate its  investments.  As of June 30,
2001, the Company had cash and investments of $95,110,561 (at amortized cost) of
which $91,231,964 (96%) were investments of Crusader.

As of the quarter ended June 30, 2001, the Company had invested  $91,867,642 (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  $91,867,642  (at
amortized cost) include  $17,344,603  (19%) of pre-refunded  state and municipal
tax-exempt bonds, $6,127,756 (7%) of U.S. treasury securities, $67,995,283 (74%)
of high-quality industrial and miscellaneous bonds, and $400,000 of certificates
of deposit.  The tax-exempt  interest income earned for the three and six months
ended June 30, 2001,  was $221,066 and $454,229,  respectively.  The  tax-exempt
interest  income  earned for the three and six months ended June 30,  2000,  was
$308,286 and $640,681, respectively.

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


                                      8
<PAGE>

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

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

Cash flow used from  operations  for the six  months  ended June 30,  2001,  was
$1,061,699 and was primarily due to the net loss of $1,044,621 for the period.

On May 18, 2001, the Company paid the five-cent  ($0.05) per share cash dividend
that was declared by the Board of Directors on March 1, 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 six
months ended June 30, 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 from the proceeds of the sale of U.S. treasury notes.  No shares of the
common stock of the Company were  repurchased in the three months ended June 30,
2001.

Although  material capital  expenditures may also be funded through  borrowings,
the Company believes that its cash and short-term  investments at June 30, 2001,
net of trust restriction of $2,789,125,  statutory  deposits of $2,725,000,  and
the dividend  restriction  between  Crusader  and  Unico,  plus  the  cash to be
generated  from   operations,   should  be  sufficient  to  meet  its  operating
requirements  during the next twelve  months  without the necessity of borrowing
funds.

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


City of Los Angeles Business License
------------------------------------
On September 13, 2000,  the City of Los Angeles  audited  Unico (parent  company
only) for the years 1997, 1998 and 1999 with respect to its Los Angeles business
license gross  receipts  tax. The audit  resulted in an assessment of $97,681 in
gross receipts tax, interest of $24,196, and penalties of $39,072,  resulting in
a total amount  claimed due of $160,949.  The assessment was based on the city's
position  that expenses of Unico's  subsidiaries  that are paid by Unico (parent
company) are subject to the gross receipts  business tax when those expenses are
reimbursed by the  subsidiaries to Unico.  The Company  disagreed with the audit
findings and 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.


                                       9
<PAGE>

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

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

The Company had a net loss of  $1,096,725  for the three months  ending June 30,
2001,  compared to net income of $612,072  for the three  months  ended June 30,
2000, a decrease in net income of $1,708,797.  For the six months ended June 30,
2001,  the  Company  had a net  loss  $1,044,621,  compared  to  net  income  of
$1,247,081  for the six months  ended June 30, 2000, a decrease in net income of
$2,291,702.  Total  revenues  increased  $960,867 (10%) for the three months and
$679,449 (3%) for the six months ended June 30, 2001, when compared to the three
and six months ended June 30, 2000.

PREMIUM WRITTEN before reinsurance  increased $1,337,963 (16%) to $9,615,414 for
the three  months and  increased  $1,942,185  (12%) to  $18,490,849  for the six
months ended June 30, 2001,  compared to the three and six months ended June 30,
2000. Although the Company attempts to be competitive on price, it believes that
maintaining  adequate  rates  on the  insurance  policies  it  sells is a better
business strategy than increasing total written premium by selling more policies
at inadequate  rates. The Company believes that the growth in written premium in
the  current  quarter  and year-to-date  periods  is the  result of a  continued
subsidence in the intensity of price-based  competition in the property/casualty
insurance  market.  The Company  cannot  determine how long the existing  market
conditions will continue, nor in which direction they might change.


The increase in written  premium in California  accounted for $969,456  (72%) of
this  increase in the three months and  $1,408,186  (73%) of the increase in the
six  months  ended  June 30,  2001.  Crusader's  written  premium by state is as
follows:

<TABLE>
<CAPTION>

                                  Three Months Ended June 30                            Six Months Ended June 30
                                  --------------------------                            ------------------------
                                                           Increase                                             Increase
                              2001            2000        (Decrease)             2001            2000          (Decrease)
                              ----            ----         --------              ----            ----           --------
<S>                        <C>             <C>           <C>                 <C>              <C>              <C>
 California                $8,043,077      $7,073,621      $969,456          $15,533,228      $14,125,042      $1,408,186
 Ohio                         385,195         189,191       196,004              696,346          305,337         391,009
 Arizona                      353,151         320,552        32,599              633,782          681,050         (47,268)
 Pennsylvania                 156,229         130,324        25,905              400,006          347,477          52,529
 Montana                      192,317         175,445        16,872              308,592          256,667          51,925
 Washington                   179,604         176,396         3,208              295,078          392,815         (97,737)
 Oregon                       109,412         128,794       (19,382)             242,448          278,423         (35,975)
 Texas                         70,359          60,083        10,276              233,015          109,148         123,867
 Nevada                       115,208          17,551        97,657              127,803           40,124          87,679
 Idaho                          6,018           4,402         1,616               15,707            4,402          11,305
 Kentucky                       4,844           1,092         3,752                4,844            8,179          (3,335)
                            ---------       ---------     ---------           ----------       ----------       ---------
      Total                $9,615,414      $8,277,451    $1,337,963          $18,490,849      $16,548,664      $1,942,185
                            =========       =========     =========           ==========       ==========       =========

</TABLE>

PREMIUM EARNED before reinsurance  increased $586,434 (7%) to $8,680,327 for the
three months and increased $779,168 (5%) to $16,989,613 for the six months ended
June 30, 2001,  compared to the three and six months  ended June 30,  2000.  The
increase in earned premium is a direct result of the related increase in written
premium previously discussed.


                                       10
<PAGE>

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

PREMIUM CEDED  decreased  $520,940  (32%) to $1,093,666 for the three months and
$183,623 (6%) to $2,770,489 for the six months ended June 30, 2001,  compared to
the three and six months ended June 30, 2000.  Earned  premium ceded consists of
both premium ceded under the Company's current reinsurance contracts and premium
ceded to the Company's  provisionally rated reinsurance contracts.  The decrease
in ceded premium is primarily the result of the decrease in premium ceded by the
Company under its provisionally rated reinsurance contract.  Premium ceded under
the provisionally rated contract, which was canceled on a runoff basis effective
December 31, 1997, is subject to adjustment based on the amount of losses ceded,
limited by a maximum percentage that can be charged by the reinsurer. The change
in premium ceded between the quarter and year-to-date periods is as follows:

                                                Three Months       Six Months
                                                   Ended             Ended
                                               June 30, 2001     June 30, 2001
                                               -------------     -------------
Increase in ceded premium (excluding
 provisionally rated premium ceded)               $ 62,760           $ 85,471

(Decrease) in provisionally rated
  premium ceded                                   (583,700)          (269,094)
                                                   -------            -------
    Net decrease in ceded premium                $(520,940)         $(183,623)
                                                   =======            =======

NET INVESTMENT INCOME,  excluding realized  investment gains,  decreased $83,092
(5%) to $1,431,465  for the three months and $139,915 (5%) to $2,898,799 for the
six months ended June 30, 2001,  compared to investment income of $1,514,557 for
the three months and  $3,038,714  for the six months  ended June 30,  2000.  The
decrease in investment  income is primarily due to a decrease in invested assets
due to the cost of the repurchase of the Company's common stock. The Company has
funded  the  common  stock  repurchase  from  cash on hand,  the  maturities  of
short-term investments, and the proceeds of the sale of U.S. treasury bonds.

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

GROSS  COMMISSION  AND FEE INCOME  decreased  $81,676 (6%) to $1,388,032 for the
three months and decreased  $135,261 (5%) to $2,748,799 for the six months ended
June 30, 2001,  compared to the three and six months  ended June 30,  2000.  The
decrease for the three and six months consisted of the following:

                                      Three Months Ended        Six Months Ended
                                         June 30, 2001            June 30, 2001
                                         -------------            -------------

Service fee income                         $ 24,903                  $ 15,803
Other commission and fee income              11,104                    15,226
Health and life insurance program            (7,770)                  (21,629)
Workers' compensation program               (13,205)                  (25,936)
Daily automobile rental insurance program:
  Excluding contingent commission *         (26,729)                  (58,891)
  Contingent commission                     (69,979)                  (59,834)
                                             ------                    ------
    Net (decrease) in commission
      and fee income                       $(81,676)                $(135,261)
                                             ======                   =======

*    Due to intense price  competition,  written premium in the daily automobile
     rental insurance program has decreased approximately 15% for both the three
     months and six months ended June 30, 2001. This decrease in written premium
     has  resulted  in a  decrease  in  commission  and  fee  income  (excluding
     contingent  commission) of $26,729 for the three months and $58,891 for the
     six  months  ended  June 30,  2001.  To avoid  underwriting  losses for the
     non-affiliated insurer, the Company continues to produce business only at
     rates that it believes to be adequate.  The Company  cannot  determine  how
     long the existing market  conditions will continue,  nor in which direction
     they might change.


                                       11
<PAGE>

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

LOSSES AND LOSS  ADJUSTMENT  EXPENSES  were 108% of net  premium  earned for the
three  months and 96% of net  premium  earned for the six months  ended June 30,
2001,  compared to 73% of net premium earned for the three months and six months
ended June 30, 2000.  This increase was primarily due to an increase in incurred
losses of prior years of approximately  $2,992,000 (adverse  development) in the
three months and $3,877,000  (adverse  development) in the six months ended June
30,  2001,  compared  to an  increase  in  incurred  losses  of  prior  years of
approximately $528,000 (adverse development) in the three months and an increase
in  incurred  losses  for  prior  years  of  approximately  $1,031,000  (adverse
development) in the six months ended June 30, 2000.


The Company's incurred losses and loss adjustment expenses for the quarter ended
June 30, 2001,  continued to be negatively  impacted by higher than  anticipated
claim cost from business outside of California  (primarily from liquor liability
claims) and from continued losses due to the impact of changes in California law
that expanded  coverage and increased loss exposure  (primarily on  construction
defect  claims - Montrose  Chemical  Corp.  v. Admiral  Insurance Co. (1995) and
Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. (1996). The most
significant  of these  factors  in both the first and second  quarter  were from
liquor  liability claims for losses  occurring  outside  California in 1999 that
were  reported to the Company in 2001.  These claims arise from the liability of
tavern  owners  related to the sale of alcoholic  beverages.  The  frequency and
severity of these claims were significantly greater than had been anticipated by
the  Company.  The Company is taking  corrective  actions to address the adverse
development on its  non-California  liquor  liability  coverages.  These actions
include  instituting more stringent  underwriting  criteria,  limiting coverages
offered, and increasing rates.

POLICY ACQUISITION COSTS consist of commissions, premium taxes, inspection fees,
and certain other  underwriting  costs,  which are related to the  production of
Crusader  insurance  policies.  These costs include both  Crusader  expenses and
allocated  expenses  of other  Unico  subsidiaries.  Crusader's  reinsurers  pay
Crusader  a  ceding  commission,  which  is  primarily  a  reimbursement  of the
acquisition cost related to the ceded premium.  Policy acquisition costs, net of
ceding  commission,  are  deferred  and  amortized  as the related  premiums are
earned.  These costs were 28% of net premium earned for the three months and 29%
of net earned premium for the six months ended June 30, 2001, compared to 31% of
net premium earned for both the three months and six months ended June 30, 2000.


SALARIES AND EMPLOYEE  BENEFITS  increased  $18,283 (2%) to  $1,116,585  for the
three months and increased  $50,427 (2%) to $2,230,290  for the six months ended
June 30, 2001,  compared to salary and employee  benefits of $1,098,302  for the
three months and $2,179,863 for the six months ended June 30, 2000.

COMMISSIONS TO  AGENTS/BROKERS  decreased  $6,857 (2%) to $316,810 for the three
months and decreased  $16,978 (3%) to $639,817 for the six months ended June 30,
2001, compared to the three and six months ended June 30, 2000.

OTHER  OPERATING  EXPENSES  decreased  $113,291  (16%) for the three  months and
$16,826 (1%) for the six months  ended June 30, 2001,  compared to the three and
six months ended June 30, 2000.  The decrease in the three months was  primarily
due to a reduction  in legal fees of $49,057  related to the  settlement  of the
State of Washington  regulatory  proceedings on January 31, 2001, and a decrease
in marketing expenses of $46,732.

INCOME TAX  PROVISION  provided a benefit of $638,691 for the three months and a
benefit of $702,630 for the six months  ended June 30, 2001,  compared to income
tax expense of $196,398  (24% of income  before  taxes) in the three  months and
$389,704  (24% of income  before  taxes) in the six months  ended June 30, 2000.
This change was  primarily due to a pre-tax loss of  $1,735,416  (including  tax
exempt  investment income of $197,906) in the three months and a pre-tax loss of
$1,747,251  (including  tax exempt  investment  income of  $386,094)  in the six
months ended June 30, 2001,  compared to pre-tax  income of $808,470  (including
tax exempt investment income of $262,044) in the three months and pre-tax income
of $1,636,785  (including tax exempt  investment  income of $544,579) in the six
month ended June 30, 2000.

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


                                       12
<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:

<TABLE>
<CAPTION>
                                                       June 30           December 31          Increase
                                                         2001               2000             (Decrease)
                                                         ----               ----              --------
<S>                                                  <C>                 <C>                <C>
Fixed maturity bonds (at amortized value)            $91,467,642         $94,398,077        $(2,930,435)
Short-term cash investments (at cost)                  3,125,120           3,355,354           (230,234)
Equity securities (at cost)                                2,400              25,920            (23,520)
Certificates of deposit (over 1 year, at cost)           400,000             400,000                  -
                                                      ----------          ----------          ---------
     Total invested assets                           $94,995,162         $98,179,351        $(3,184,189)
                                                      ==========          ==========          =========
</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 4 - SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
--------------------------------------------------------
(a)  On June 1, 2001, the Company held its Annual Meeting of Stockholders.
(b)  Proxies for the meeting were solicited pursuant to Regulation 14 under the
     Securities Exchange Act of 1934; there was no solicitation in opposition to
     nominees of the Board of Directors as listed in the Proxy Statement and all
     such nominees were elected.
(c)  At the meeting, the following persons were elected by the vote indicated as
     directors to serve until the next annual meeting of shareholders and until
     their successors are duly elected and qualified. There were 27,080 no
     broker non-votes.

            Name                   For               Against or Withheld
            ----                   ---               -------------------
     Erwin Cheldin               4,738,841                 2,936
     Lester A. Aaron             4,738,841                 2,936
     Cary L. Cheldin             4,738,841                 2,936
     George C. Gilpatrick        4,738,941                 2,836
     David A. Lewis              4,738,914                 2,863
     Warren D. Orloff            4,737,929                 3,848
     Donald B. Urfrig            4,738,941                 2,836



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

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


                                       13
<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: August 10, 2001     By:   /s/ Erwin Cheldin
                                -----------------
                                Erwin Cheldin
                                Chairman of the Board, President and Chief
                                Executive Officer, (Principal Executive Officer)



Date: August 10, 2001     By:   /s/ Lester A. Aaron
                                -------------------
                                Lester A. Aaron
                                Treasurer, Chief Financial Officer, (Principal
                                Accounting and Principal Financial Officer)


                                       14