=================================================================
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549


FORM 10-Q


     [XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

          For the Quarterly Period Ended September 30, 1995

OR

     [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-7461

ACCEPTANCE INSURANCE COMPANIES INC.
(Exact name of registrant as specified in its charter)


          Delaware                              31-0742926
(State or other jurisdiction of              (I.R.S. Employer 
incorporation or organization)             Identification Number)

222 South 15th St., Suite 600 N.
       Omaha, Nebraska                           68102
(Address of principal executive offices)       (Zip Code)

         Registrant's telephone number, including area code:      
                             (402) 344-8800

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  XX             NO     
                         -----             -----
The number of shares of each class of the Registrant's common 
stock outstanding on November 3, 1995 was:

Class of Common Stock               No. of Shares Outstanding
Common Stock, $.40 Par Value                 15,101,236

=================================================================
<PAGE>
  
               ACCEPTANCE INSURANCE COMPANIES INC.

                            FORM 10-Q

TABLE OF CONTENTS

                                                                 

PART I. FINANCIAL INFORMATION

     Item 1.  Financial Statements:

          Consolidated Balance Sheets
          September 30, 1995 (unaudited) and December 31, 1994    
            (audited)                                            

          Consolidated Statements of Operations (unaudited)
          Three Months and Nine Months Ended September 30, 1995   
            and 1994                                             

          Consolidated Statements of Cash Flows (unaudited)
          Nine Months Ended September 30, 1995 and 1994          
          
          Notes to Interim Consolidated Financial Statements      
            (unaudited)                                          

     Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                    

PART II. OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K                   

     Signatures

<PAGE>
PART I.   FINANCIAL INFORMATION
-------------------------------
Item 1.   Financial Statements
<TABLE>
<CAPTION>
               ACCEPTANCE INSURANCE COMPANIES INC.
                   CONSOLIDATED BALANCE SHEETS
                         (in thousands)
                                  
                                    September 30, December 31,   
                                        1995          1994
                                    ------------- ------------
                                     (unaudited)    (audited)

<S>                                    <C>          <C>
ASSETS
Investments:
Fixed maturities available for sale    $228,830     $190,180
Marketable equity securities - 
  preferred stock                        24,939        6,758
Marketable equity securities - 
  common stock                           11,951        5,772
Mortgage loans and other investments      1,705        1,869 
Real estate                               3,881        3,891
Short-term investments, at cost, 
  which approximates market              74,379       56,273
                                       --------     --------
                                        345,685      264,743

Cash                                      2,707        9,339
Equity investment in Major 
  Realty Corporation                      4,843        5,079
Receivables, net                        160,113       76,993
Reinsurance recoverable on unpaid 
  loss and loss adjustment expenses     175,673       79,811
Prepaid reinsurance premiums             37,793       25,988
Property and equipment, net               5,102        4,572
Deferred policy acquisition costs        24,243       19,834
Excess of cost over acquired net 
  assets                                 37,287       38,142
Deferred income tax                      10,350       13,025
Other assets                              6,107        5,561
                                       --------     --------     
Total assets                           $809,903     $543,087 
                                       ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Losses and loss adjustment expenses    $368,514     $221,325
Unearned premiums                       124,294       97,170
Amounts payable to reinsurers            67,155       19,309
Accounts payable and accrued 
  liabilities                            30,813       16,529
Bank borrowings                          49,000       29,000  
                                       --------     --------
     Total liabilities                  639,776      383,333

Contingencies                              --           --

Stockholders' equity:
 Preferred stock, no par value, 
  5,000,000 shares authorized, 
  none issued                              --           --
 Common stock, $.40 par value, 
  20,000,000 shares authorized; 
  15,135,795 and 15,128,846 
  shares issued                           6,055        6,052
  Capital in excess of par value        194,769      194,674
  Unrealized gain (loss) on 
    available-for-sale securities,
    net of tax                           (1,951)     (13,705)
  Accumulated deficit                   (24,482)     (23,003)  
                                       --------     --------
                                        174,391      164,018
Less:
Treasury stock, at cost, 35,559 
  shares                                 (1,564)      (1,564)
Contingent stock, 240,000 shares         (2,700)      (2,700) 
                                       --------     --------
 
Total stockholders' equity              170,127      159,754  
                                       --------     --------
Total liabilities and stockholders' 
  equity                               $809,903     $543,087  
                                       ========     ========
<FN>
       The accompanying notes are an integral part of the 
           interim consolidated financial statements.
</FN>
/TABLE
<PAGE>
<TABLE>
<CAPTION>
               ACCEPTANCE INSURANCE COMPANIES INC.
              CONSOLIDATED STATEMENTS OF OPERATIONS
           for the three months and nine months ended 
                   September 30, 1995 and 1994
              (in thousands, except per share data)
                           (unaudited)
                                       
                               Three Months        Nine Months
                             ----------------  ------------------
                               1995     1994     1995      1994  
                             -------  -------  --------  --------
<S>                        <C>       <C>      <C>       <C>
Revenues:
Insurance premiums earned  $ 90,373  $63,425  $204,062  $148,119
Insurance agency 
  commissions                   574      837     2,216     2,639
Net investment income         5,407    3,553    14,645     9,230
Net realized capital gains      779      101     1,812       499
                           --------  -------  --------  --------
                             97,133   67,916   222,735   160,487
                           --------  -------  --------  -------- 
Costs and expenses:
Cost of revenues:
Insurance losses and loss 
  adjustment expenses        85,744   45,207   164,863   105,790
Insurance agency costs          615      755     2,067     2,422
Insurance underwriting 
  expenses                   19,175   14,530    55,183    38,483
General and administrative 
  expenses                      437      561     1,685     1,253
                           --------  -------  --------  --------
                            105,971   61,053   223,798   147,948
                           --------  -------  --------  --------
Operating profit (loss)      (8,838)   6,863    (1,063)   12,539 
                           --------  -------  --------  --------

Other income (expense):
Interest expense               (563)    (461)   (1,607)   (1,160)
Share of net loss of 
  investee                      (79)     (65)     (236)     (219)
Other, net                       (5)     (11)       76        34 
                           --------  -------  --------  --------
                               (647)    (537)   (1,767)   (1,345)

Income (loss) before 
  income taxes and 
  minority interests         (9,485)   6,326    (2,830)   11,194
Income tax expense 
  (benefit):
Current                        (344)   1,301     1,346     1,366
Deferred                     (3,180)  (1,301)  (2,697)    (3,501)

Minority interests in net 
  income of consolidated 
  subsidiaries                 --       --       --           80
                           --------  -------  --------   -------

Net income (loss)          $ (5,961) $ 6,326  $(1,479)  $ 13,249 
                           ========  =======  =======   ========

Net income (loss) per 
  share:
Primary                    $   (.40) $   .51  $  (.10)  $   1.12
                           ========  =======  =======   ========
Fully diluted              $   (.40) $   .50  $  (.10)  $   1.09 
                           ========  =======  =======   ========

<FN>

       The accompanying notes are an integral part of the 
           interim consolidated financial statements.
</FN>
/TABLE
<PAGE>
<TABLE>
<CAPTION>
               ACCEPTANCE INSURANCE COMPANIES INC.
              CONSOLIDATED STATEMENTS OF CASH FLOWS
      for the nine months ended September 30, 1995 and 1994
                         (in thousands)
                           (unaudited)

                                              1995       1994  
                                           ---------   --------
<S>                                        <C>          <C>
Cash flows from operating activities:
Net income (loss)                          $  (1,479)   $13,249
Net adjustment to reconcile net income 
  (loss) to net cash provided by 
  operating activities                        38,846     35,785
                                           ---------    -------
Net cash provided by operating activities     37,367     49,034
                                           ---------    -------
Cash flows from investing activities:
Proceeds from sales of investments              --          641
Proceeds from sales of investments 
  available for sale                          82,527     22,151
Proceeds from maturities of investments       38,228      6,545
Proceeds from maturities of investments 
  available for sale                           8,126     13,828
Purchases of investments                     (41,092)   (29,508)
Purchases of investments available for 
  sale                                      (134,087)   (57,285)
Purchases of property and equipment           (1,748)    (1,172)
                                           ---------    -------
 
Net cash used for investing activities       (48,046)   (44,800)
                                           ---------    -------
Cash flows from financing activities:
Repayments of bank borrowing                    --      (18,597)
Proceeds from bank borrowings                 20,000     29,000
Repayments of other borrowings                  --         (354)
Minority interests                              --            7
Proceeds from issuance of common stock            98        236 
Other                                           --         (340)
                                           ---------    -------
Net cash provided by financing activities     20,098      9,952
                                           ---------    -------
Net increase in cash and 
  short-term investments                       9,419     14,186
Cash and short-term investments at 
  beginning of period                         50,236     17,561 
                                           ---------    -------
Cash and short-term investments at end 
  of period                                $  59,655    $31,747 
                                           =========    =======
<PAGE>
Supplemental disclosure of cash 
  flow information:
Cash paid during the period for interest   $   1,404    $ 1,018 
                                           =========    =======
Cash paid during the period for income 
  taxes                                    $   4,253    $    78 
                                           =========    =======
Non-cash financing activities:
  Issuance of common stock for merger
  with Statewide                           $    --      $ 3,100
                                           =========    =======

<FN>
       The accompanying notes are an integral part of the 
           interim consolidated financial statements.
</FN>
</TABLE>




<PAGE>
               ACCEPTANCE INSURANCE COMPANIES INC.

       NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                           (unaudited)

1.   Summary of Significant Accounting Policies:

     Principles of Consolidation

     The Company's consolidated financial statements include the
     accounts of Acceptance Insurance Companies Inc. and its
     majority owned subsidiaries (the "Company").  All significant
     intercompany transactions have been eliminated.


     Management's Opinion

     The accompanying consolidated financial statements reflect all
     adjustments, consisting only of normal recurring adjustments
     except as otherwise disclosed, which in the opinion of
     management are considered necessary to fairly present the
     Company's financial position as of September 30, 1995 and
     December 31, 1994, and the results of operations for the three
     months and nine months ended September 30, 1995 and 1994 and
     cash flows for the nine months ended September 30, 1995 and
     1994.

     Statements of Cash Flows

     The Company aggregates cash and short-term investments with
     maturity dates of three months or less from the date of
     purchase for purposes of reporting cash flows.  As of
     September 30, 1995 approximately $17,431,000 of short-term
     investments had a maturity date at acquisition of greater than
     three months.

     Recent Statements of Financial Accounting Standards

     On January 1, 1995 the Company adopted Statement of Financial
     Accounting Standards (SFAS) No. 114 and 118, "Accounting by
     Creditors for Impairment of a Loan."  As of January 1, 1995
     and September 30, 1995 the Company has no material loans that
     are considered impaired.  Accordingly, the adoption of SFAS
     No. 114 and 118 had no effect on the Company's financial
     statements.

     Reclassifications

     Certain prior year accounts have been reclassified to conform
     with current period presentation.

<PAGE>
2.   Per Share Data:

     Primary and fully diluted earnings per share are based on the
     weighted average shares outstanding of approximately 14.9
     million and 15.1 million, respectively, for the three months
     ended September 30, 1995 and approximately 13.5 million and
     13.7 million, respectively, for the three months ended
     September 30, 1994.  Primary earnings per share and fully
     diluted earning per share are based on the weighted average
     shares outstanding of approximately 14.9 million and 15.1
     million, respectively, for the nine months ended September 30,
     1995 and approximately 13.4 million and 13.6 million,
     respectively, for the nine months ended September 30, 1994. 
     Included in weighted average shares outstanding in 1994 is the
     assumed exercise of all outstanding options and warrants
     utilizing the modified treasury stock method, since average
     outstanding options and warrants during the period exceeded
     20% of the outstanding stock.  Under this method, appropriate
     adjustment to net income is made to reflect the assumed use of
     the proceeds of the exercise.

3.   Investments:

     The amortized cost and related market values of debt and
     equity securities in the accompanying balance sheets are as
     follows (in thousands): 


<PAGE>
<TABLE>
<CAPTION>
                                       Gross     Gross            
                           Amortized Unrealized Unrealized Market
                             Cost     Gains     Losses     Value  
                           --------- ---------  ---------- ------
<S>                          <C>      <C>       <C>      <C>
September 30, 1995:
Fixed maturities available
  for sale:
U.S. Treasury and 
  government securities      $ 62,664 $    533  $    133 $ 63,064
States, municipalities and 
  political subdivisions       70,402    1,154       371   71,185 
Mortgage-backed securities     73,587      338     6,757   67,168
Other debt securities          27,075      762       424   27,413
                             -------- --------  -------- --------
                             $233,728 $  2,787  $  7,685 $228,830
                             ======== ========  ======== ========
Marketable equity 
  securities - preferred 
  stock                      $ 25,008 $    377  $    446 $ 24,939
                             ======== ========  ======== ========

Marketable equity 
  securities - common 
  stock                      $  9,987 $  2,455  $    491 $ 11,951
                             ======== ========  ======== ========

December 31, 1994:
Fixed maturities available 
  for sale:
U.S. Treasury and 
  government securities      $ 68,308 $      4  $  2,225 $ 66,087
States, municipalities and
  political subdivisions       39,544        8     1,957   37,595
Mortgage-backed securities     73,024     --      13,949   59,075
Other debt securities          28,199      100       876   27,423
                             -------- --------  -------- --------
                             $209,075 $    112  $ 19,007 $190,180
                             ======== ========  ======== ========
Marketable equity 
  securities - preferred 
  stock                      $  7,803 $      4  $  1,049 $  6,758
                             ======== ========  ======== ========
Marketable equity 
  securities - common 
  stock                      $  5,960 $    530  $    718 $  5,772
                             ======== ========  ======== ========
 
/TABLE
<PAGE>
4.   Insurance Premiums and Claims

     Insurance premiums written and earned by the Company's
     insurance subsidiaries for the three months and nine months
     ended September 30, 1995 and 1994 are as follows (in
     thousands):
<TABLE>
<CAPTION>
                             Three Months           Nine Months   
                         ------------------   -------------------
                           1995       1994      1995       1994   
                       --------   --------   --------  ----------
<S>                      <C>       <C>        <C>       <C> 
Direct premiums written  $205,982  $168,170   $419,081  $336,517
Assumed premiums written   12,343    18,235     12,888    24,630
Ceded premiums written   (124,065) (117,792)  (212,588) (187,415)
                         --------  --------   --------  --------
Net premiums written     $ 94,260  $ 68,613   $219,381  $173,732
                         ========  ========   ========  ========
     

Direct premiums earned   $200,355  $160,549   $392,470  $305,036
Assumed premiums earned    10,577    18,401     12,375    24,560
Ceded premiums earned    (120,559) (115,525)  (200,783) (181,477)
                         ========  ========   ========  ========
                         
Net premiums earned      $ 90,373  $ 63,425   $204,062  $148,119 
                         ========  ========   ========  ========

</TABLE>

     Insurance loss and loss adjustment expenses have been reduced
     by recoveries recognized under reinsurance contracts of
     approximately $140,754,000 and $53,416,000 for the three
     months ended September 30, 1995 and 1994, respectively.
     Insurance loss and loss adjustment expenses have been reduced
     by recoveries recognized under reinsurance contracts of
     approximately $219,584,000 and $101,378,000 for the nine
     months ended September 30, 1995 and 1994, respectively.

5.   Bank Borrowings, Term Debt and Other Borrowings:

     The Company's borrowing arrangements with its bank lenders as
     of September 30, 1995 provide a $75 million three year
     revolving line of credit which, with the consent of the banks,
     can be renewed annually for three years, and a $15 million
     line of credit with a maturity of the earlier of July 1997 or
     one year from the date of the borrowing.  Further, the Company
     will select its interest rate as either the prime rate or
     LIBOR plus a margin of .75% to 1.5% and 1.5% to 2.25% for the
     $75 million revolving line of credit and $15 million line of
     credit, respectively, depending on the Company's debt to
     equity ratio.  Interest will be payable quarterly.  The
     Company borrowed $20 million on September 29, 1995 of which
     the proceeds were contributed to the capital of one of the
     insurance subsidiaries.  On September 30, 1995 the Company had
     elected LIBOR plus .75% or a weighted average rate of 6.69%. 
     On September 30, 1995, the Company had $49 million outstanding
     under this arrangement.  

6.   Income Taxes:

     As of September 30, 1995, management believes it is more
     likely than not that the Company will realize a portion of the
     deferred tax asset.  The valuation allowance at September 30,
     1995 primarily relates to capital loss items whose realization
     is uncertain.  The net deferred tax asset is as follows (in
     thousands):
                          
<TABLE>
<CAPTION>
                                                                  
                                       September 30,  December 31, 
                                            1995          1994   
                                       -------------  ------------
<S>                                        <C>           <C>
Unpaid losses and loss adjustment 
  expenses                                   9,670         7,263
Unearned premiums                            6,055         4,840
Allowances for doubtful accounts               916           449  
     
Other                                        2,146         1,599
Unrealized loss on marketable 
  equity securities                           --             419
Unrealized loss on fixed maturities 
  available for sale                         1,714         6,424
Major Realty basis difference                7,939         7,632
                                           -------       ------- 
     Deferred tax asset                     28,440        28,626  

Deferred policy acquisition costs           (8,485)       (6,744)
Other                                         (886)         (681)
Unrealized gain on marketable 
  equity securities                           (663)         -- 
                                           -------       ------- 
  
     Deferred tax liability                (10,034)       (7,425)
                                           -------       ------- 
                                            18,406        21,201
Valuation allowance                         (8,056)       (8,176)
                                           -------       -------
     Net deferred tax asset                $10,350       $13,025
                                           =======       =======
</TABLE>

     Income taxes computed by applying statutory rates to income
     before income taxes are reconciled to the provision for income
     taxes set forth in the consolidated financial statements as
     follows for the nine months ended September 30, 1995 (in
     thousands):

<TABLE>
<S>                                                  <C>
Computed U.S. federal income taxes                   $  (990)
Nondeductible amortization of goodwill and 
  other intangibles                                      404
Tax-exempt interest income                              (752)
Dividends received deduction                            (257)
Other                                                    244  
                                                     -------
  Income taxes provided                              $(1,351)
                                                     =======
</TABLE>
<PAGE>
PART 1.
-------
ITEM 2.

               ACCEPTANCE INSURANCE COMPANIES INC.
              MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following discussion and analysis of financial condition and
results of operations of the Company and its consolidated
subsidiaries is based upon the Company's interim consolidated
financial statements and the notes thereto included in this report.

RESULTS OF OPERATIONS

Three months and nine months ended September 30, 1995
Compared to three months and nine months ended September 30, 1994

The Company's net income for the three months ended September 30,
1995 decreased $12.3 million from the same period in 1994, while
the net income for nine months decreased by $14.7 million as
compared to the first nine months of 1994.  The principal factor
effecting this decline was the Company's decision to strengthen
its estimate of loss reserves for prior years, resulting in a
charge to earnings of $17.5 million, or $11.3 million on an
after-tax basis, in the third quarter of 1995.  In addition, with
the Company's increase in its estimates for ultimate loss ratios
for prior years, the Company also increased its expected ultimate
loss ratios for the 1995 accident year.  These negative effects
were partially offset by an increase in the Company's investment
income as well as positive results in the Company's crop
insurance division.

The Company began a comprehensive review of its claim handling
practices during the second half of 1993.  As a result of this
review, the Company implemented new standards and procedures
designed to create case loss reserve adequacy as soon as
possible, reduce loss adjustment expense and shorten the life
span of open claims.  These new procedures and standards were
implemented during 1994, and resulted in new assumptions
regarding the development of the Company's loss reserves.  While
the Company believes that these steps will ultimately benefit the
Company's historical loss development patterns, the Company began
to notice deviations from the loss development patterns expected
at December 31, 1994 during the second quarter of 1995.  The
Company noted in the second quarter a deterioration in the loss
ratio of its commercial automobile business principally
attributable to a deviation from predicted development patterns
for losses for the 1994 year.  This trend continued in the third
quarter of 1995, and while the noted deterioration was
principally in the automobile line, the Company believed that
similar deviations might appear in subsequent years in other
lines of business which developed more slowly than automobile,
and thus the Company chose in the third quarter to evaluate all
major liability lines of business.  The $17.5 million increase in
reserves for 1994 and prior year losses were as follows by year
and line of business.

<TABLE>
<CAPTION>
                       Lines of Business

                        (in millions)
 
                     Other
Accident   Auto     Liability            Workers
Year     Liability   & CMP    Products     Comp.   Other   Total
-------- ---------  --------- --------   -------   -----   -----

<S>         <C>        <C>      <C>       <C>      <C>       <C>
1994        4.8        2.3       .1       1.2      --         8.4
1993        1.4         .7      1.2        .9      .2         4.4
1992         .2        2.7       .3        .8      .1         4.1
1991 &
  Prior     --          .3       .1        .2      --          .6
            ---        ---      ---       ---      ---       ----

Total       6.4        6.0      1.7       3.1      .3        17.5

</TABLE>

After the Company completed its review of prior year losses, the
new development pattern assumptions were used to estimate
ultimate losses for the current 1995 accident year.  These new
assumptions led to an increase in the Company's loss ratio
excluding crop business for the 1995 accident year from 64% for
the first six months of 1995 to 70% for the first nine months of
1995.  For the three months ended September 30, 1995, the Company
recorded a 75.6% loss and loss adjustment expense ratio,
excluding the $17.5 million charge for prior year loss
strengthening, as compared to 71.3% for the same period during
1994.  The higher loss ratio in 1995 is attributed primarily to
the reassessment of the 1995 accident year loss ratio during the
third quarter of the current year.  For the nine months ended
September 30, 1995, the Company's loss and loss adjustment
expense ratio was 69.9%, exclusive of $22.3 million in charges
for prior year loss strengthening, as compared to 71.4% for the
nine months ended September 30, 1994.  This decrease in loss
ratio for the nine months can be attributed primarily to a
decrease in the Company's loss ratio in its crop hail business.

The Company's operating profit or loss from its crop insurance
operations are generally recognized in the quarters ending
September 30 and December 31 as the majority of the insured crops
are harvested.  Each crop season is somewhat unique, and
therefore, the amount of profit or loss recorded in each quarter
will vary from year to year as the time of the harvest varies. 
The Company's net income was favorably impacted during the nine
months ended September 30, 1995 from its crop insurance
operations.  

The Company has two major divisions in its crop insurance
products, crop hail insurance, and Federal MPCI crop insurance. 
The Company's crop hail insurance results for the nine months
ended September 30, 1995 improved dramatically over the Company's
experience for the same nine months of 1994.  During 1995, the
crop hail business produced underwriting earnings of $1.4 million
on $35.8 million of net earned premium.  During the same period
in 1994, the Company experienced a loss of $6.5 million on $21.3
million of net earned premium.  

The Company's MPCI business contributed $10.3 million in pre-tax
income for the nine months ended September 30, 1995 as compared
to $11.1 million pre-tax income for the nine months ended
September 30, 1994.  This decrease in profitability was due
primarily to a much more difficult growing season during 1995
than in 1994.  In the upper Midwest where the Company retains the
majority of its MPCI exposure, the 1995 growing season was
effected by a wet spring causing delayed planting, followed by a
period of hot weather which stressed the newly emerging crops and
an early frost in September.  In contrast, the 1994 growing
season in the upper Midwest was nearly perfect resulting in
record crop yields.  While the growing conditions in 1995 were
not as favorable as they were in 1994, the Company benefitted
from an increased retained pool upon which it is paid its profit
sharing, increasing from approximately $77 million in 1994 to
$105 million in 1995.  While the final results of the MPCI
program will not be known until the end of the fourth quarter, it
is anticipated that the Company may experience further gains in
the fourth quarter if the harvest proceeds in the current
fashion.  

The Company's investment income increased 52.2% and 58.7%,
respectively, in the three and nine months ended September 30,
1995 from the same three and nine months periods during 1994. 
The increase in investment income was attributable to both an
increase in the average size of the investment portfolio as well
as an increase in yields during the three and nine months ended
September 30, 1995 as compared to similar periods in the prior
year.  For the three months ended September 30, 1995, the average
size of the investment portfolio was $329.7 million compared to
$229.2 million for the three months ended September 30, 1994. 
For the nine month period, the average size of the investment
portfolio was $311.8 million for the period ended September 30,
1995 as compared to $207.0 million for the period ended September
30, 1994.  In addition, the average pre-tax yield on this
portfolio increased from 6.2% and 5.9% for the three and nine
months ended September 30, 1994 to 6.6% and 6.3% for the three
and nine months ended September 30, 1995.  The size of the
investment portfolio increased from both positive cash flows and
approximately $53.4 million in proceeds from the exercise of
warrants in December of 1994.  Investment yields increased as the
overall interest rate environment during the first nine months of
1995 was higher than the interest rate environment in the similar
period during 1994. 

The Company's income from realized capital gains also increased
in the three and nine months ended September 30, 1995 when
compared to similar periods a year earlier.  These increases
resulted primarily from favorable changes in the interest rate
environment as well as positive trends in the stock market, both
of which allowed the Company to realize gains in its investment
portfolio.  

The Company's expense ratio showed little change during the three
and nine months ended September 30, 1995 as compared to the
similar periods in 1994.  For the quarter ended September 30,
1995, the Company's expense ratio decreased to 21.2% as compared
to 22.9% in the same period during 1994.  This decrease was
mainly attributable to the Company's deferral  of operating
expense margins in its crop insurance lines from the second
quarter of 1995 to the third quarter of 1995.  In 1995, problems
arising out of delayed planting issues resulted in changing rules
under the new Federal MPCI program, and therefore, the Company
could not estimate any operating expense margins under the
program in the second quarter of 1995.  During 1994, no such
delays occurred, and therefore, expense margins were primarily
realized in the second quarter. For the nine months ended
September 30, 1995, the Company's expense ratio was 27.0% as
compared to 26.0% in the same period during 1994.  This increase
in the expense ratio was principally attributable to an increase
in the Company's expense ratio for its property and casualty
products associated with development costs for new programs
during the 1995 year.  While property and casualty division
expenses were higher for the first nine months of 1995 as
compared to the same period in 1994, the third quarter of 1995
did see a decrease (in the underwriting expenses of the property
and casualty division) from the second quarter of 1995 of 2.1%.

The Company's net income was impacted by income tax benefits of
$1.4 million and $3.5 million during the nine months and three
months ended September 30, 1995 and $2.1 million for the nine
months ended September 30, 1994.  The benefit in the nine months
ended September 30, 1994 resulted primarily from the Company
meeting the realizability test under SFAS NO. 109, "Accounting
for Income Taxes."  The Company had recorded pre-tax losses from
1989 through 1992 and although the circumstances that generated
these losses were not indicative of operating income, management
was uncertain of future earnings and recorded the related
valuation allowance account.  At June 30, 1994 the Company had
reported several consecutive quarters of pre-tax earnings and
management believed it was more likely than not that the Company
would realize a portion of the deferred tax asset.  The deferred
tax benefit of $2.1 million recognized during the nine months
ended September 30, 1994 related to the portion of the deferred
tax asset that was estimated to be realized in future years.

The income tax benefits in the current year are primarily the
result of the Company's pre-tax losses of $2.8 million and $9.5
million for the nine months and three months ended September 30,
1995, respectively.   These losses resulted primarily from
reserve strengthening for prior accident years as described
previously and thus management continues to believe it is more
likely than not that the Company will realize a portion of the
deferred tax asset.

Recent Statement of Financial Accounting Standards

On January 1, 1995 the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 114 and 118, "Accounting by
Creditors for Impairment of a Loan."  As of January 1, 1995 and
September 30, 1995 the Company has no material loans that are
considered impaired.  Accordingly, the adoption of SFAS No. 114
and 118 had no effect on the Company's financial statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company has included a discussion of the liquidity and
capital resources requirements of the Company and the Company's
insurance subsidiaries.

The Company - Parent Only

As an insurance holding company, the Company's assets consist
primarily of the capital stock of its subsidiaries, surplus notes
issued by one of its insurance company subsidiaries and
investments held at the holding company level.  The Company's
primary sources of liquidity are dividends and other
distributions from subsidiaries, interest payments on the surplus
notes, tax sharing payments from its subsidiaries and net
investment income from, and proceeds from the sale of, holding
company investments.  The Company's liquidity needs are primarily
to service debt, pay operating expenses and taxes and make
investment in subsidiaries.

Dividends from the insurance subsidiaries of the company are
regulated by the state regulatory authorities of the states in
which each subsidiary is domiciled.  The laws of such states
generally restrict dividends from insurance companies to parent
companies to certain statutorily approved limits.  As of
September 30, 1995, the statutory limitations on dividends from
the insurance company subsidiaries to the parent without further
insurance department  approval were approximately $6.0 million. 
In addition to dividends, the parent company receives additional
liquidity from cash flows from agency and claims service
operations of its noninsurance company subsidiaries.

The Company currently holds two surplus notes issued by one of
its insurance company subsidiaries in the amount of $20.0 million
each, for a total of $40.0 million.  Each note bears interest at
the rate of 9% per annum, payable quarterly.  Although repayment
of all or part of the principal of these surplus notes requires
prior insurance department approval, no prior approval of
interest payments is currently required.

At September 30, 1995, the Company held approximately $4.7
million of cash and investments available to meet liquidity
needs.

The Company is also party to a Revolving Credit Facility with a
group of bank lenders which is secured by substantially all of
the Company's assets.  At June 30, 1995 the maximum amount which
might have been borrowed under the facility was $35.0 million. 
On July 26, 1995 the Company closed a new facility under which
the Company's maximum borrowing limit was increased to $90
million.  Generally, the new agreement provides for a $75 million
three year revolving line of credit which, with the consent of
the banks, can be renewed annually for three years, and a $15
million line of credit with a maturity of the earlier of July
1997 or one year from the date of borrowing.  Further, the
Company will select its interest rate at either the Prime rate or
LIBOR plus a margin of .75% to 1.5% and 1.5% to 2.25% for the $75
million revolving line of credit and $15 million line of credit,
respectively, depending on the Company's debt to equity ratio.

As of September 30, 1995 the Company had $49 million outstanding
under its bank facility.  All of the borrowings are currently at
0.75% over LIBOR.

The $90 million facility is being utilized primarily to
capitalize the Company's insurance company subsidiaries.  Due to
the loss in the most recent quarter resulting from a charge to
earnings to strengthen prior year loss reserves, the Company
believes that further borrowings under the facility may be
required in the fourth quarter of 1995.

Insurance Companies

The principal liquidity needs of the insurance companies are to
fund losses and loss adjustment expense payments, to pay
underwriting expenses including commissions to agents, to pay
interest under the surplus notes described above and to make tax
payments.  Available sources for these requirements are premiums
received and cash flows from investment activities.  Together,
these sources historically have been adequate to meet the
described requirements on a timely basis.  The Company monitors
the cash flows of its insurance company subsidiaries and attempts
to maintain sufficient cash to meet current operating expenses
and to structure its investment portfolio at a duration which
approximates the estimated cash requirements for the payment of
loss and loss adjustment expense.

<PAGE>
Changes in Financial Condition

The Company's stockholders' equity increased by approximately
$10.4 million at September 30, 1995 as compared to December 31,
1994.  Principal components of this increase in equity were a net
loss of $1.5 million generated during the first nine months of
1995 and a decrease in the unrealized loss, net of tax, in the
Company's available for sale securities from $13.7 million at
December 31, 1994 to $2.0 million at September 30, 1995.  

The NAIC has released its Risk Based Capital (RBC) formula for
property and casualty insurance companies.  The Company's
insurance company subsidiaries have reviewed and applied this RBC
formula for the 1994 year and have exceeded the requirements of
such formula.

Consolidated Cash Flow

Cash flows from operating activities were $37.4 million for the
nine months ended September 30, 1995, providing adequate capital
to meet all of the Company's cash needs.

Cash flows for the Company's MPCI and crop hail businesses differ
in certain respects from cash flows associated with more
traditional property and casualty lines.  MPCI premiums are not
received from farmers until the covered crops are harvested, and
when received are promptly remitted by the Company in full to the
government.  Covered losses are paid by the Company during the
growing season as incurred, with such expenditures reimbursed by
the government within three business days.  Policy acquisition
and administration expenses are paid by the Company as incurred
during the year.  The Company periodically throughout the year
receives a payment in reimbursement of its policy administration
expenses.

In the crop hail insurance business, premiums are generally not
received until after the harvest, while losses and other expenses
are paid throughout the year.

Inflation

The Company does not believe that inflation has had a material
impact on its financial condition or the results of operation.
<PAGE>
               ACCEPTANCE INSURANCE COMPANIES INC.

PART II.  OTHER INFORMATION     
---------------------------

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     See Exhibit Index.

(b)  No reports on Form 8-K were filed by the registrant during
     the quarter for which this report is filed.
<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 thereunto duly authorized.


                              ACCEPTANCE INSURANCE COMPANIES INC.



November 14, 1995             /s/  KENNETH C. COON
                              -----------------------------------
                              Kenneth C. Coon
                              Chief Executive Officer
                                   


November 14, 1995             /s/   GEORGIA M. MACE             
                              -----------------------------------
                              Georgia M. Mace     
                              Treasurer and Chief Accounting 
                                Officer
<PAGE>
               ACCEPTANCE INSURANCE COMPANIES INC.
                  QUARTERLY REPORT ON FORM 10-Q
          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995

                          EXHIBIT INDEX

NUMBER    EXHIBIT DESCRIPTION


3.(i)     Amendment to the Registrant's Restated Certificate of
          Incorporation.  Incorporated by reference to Exhibit
          3.(i) to the Registrant's Quarterly Report on Form 10-Q
          for the period ended June 30, 1995.

10.1      $90,000,000 Credit Agreement By and Among the
          Registrant, NBD Bank, N.A., First National Bank of
          Omaha, FirsTier Bank, N.A., Comerica Bank, First
          Interstate Bank of Arizona and NBD Bank, N.A., As
          Agent, dated as of July 26, 1995.  Incorporated by
          reference to Exhibit 10.1 to the Registrant's Quarterly
          Report on Form 10-Q for the period ended June 30, 1995.

10.2      Intercompany Federal Income Tax Allocation Agreement
          between Acceptance Insurance Holdings Inc. and its
          subsidiaries and the Registrant dated April 12, 1990,
          and related agreements.  Incorporated by reference to
          Exhibit 10i to the Registrant's Annual Report on Form
          10-K for the fiscal year ended August 31, 1990.

10.3      Amended and Restated Registration Rights Agreement,
          dated April 9, 1990, between the Registrant and
          Patricia Investments, Inc.  Incorporated by reference
          to Exhibit 10d to the Registrant's Quarterly Report on
          Form 10-Q for the period ended May 31, 1990.

10.4      Warrants to purchase a total of 389,507 shares of
          common stock ($.10 par value) of the Registrant dated
          April 10, 1992, issued by the Registrant to the various
          purchasers of the Floating Rate Secured Subordinated
          Notes, due 1993, Series A and B.  Incorporated by
          reference to Exhibit 10.41 to the Registrant's Annual
          Report on Form 10-K for the fiscal year ended December
          31, 1991.

10.5      Employment Agreement dated February 19, 1990 between
          Acceptance Insurance Holdings Inc., the Registrant and
          Kenneth C. Coon.  Incorporated by reference to Exhibit
          10.65 to the Registrant's Annual Report on Form 10-K
          for the fiscal year ended December 31, 1991.

<PAGE>
10.6      Employment Agreement dated July 2, 1993 between the
          Registrant and John P. Nelson.  Incorporated by
          reference to Exhibit 10.6 to the Registrant's Quarterly
          Report on Form 10-Q for the period ended September 30,
          1994.

10.7      Employment Agreement dated July 2, 1993 between the
          Registrant and Richard C. Gibson.  Incorporated by
          reference to Exhibit 10.6 to the Registrant's Quarterly
          Report on Form 10-Q for the period ended September 30,
          1994.

11        Computation of Income per share.

27        Financial Data Schedule.

99.1      The Registrant's Amended 1992 Incentive Stock Option
          Plan.  Incorporated by reference to the Registrant's
          Proxy Statement filed on or about May 2, 1995.

99.2      The Registrant's Amended Employee Stock Purchase Plan. 
          Incorporated by reference to the Registrant's Proxy
          Statement filed on or about April 29, 1994.
                                
99.3      The Registrant's Employee Stock Ownership and Tax
          Deferred Savings Plan as merged, amended and restated
          effective October 1, 1990.  Incorporated by reference
          to Exhibit 10.4 to the Registrant's Quarterly Report on
          Form 10-Q for the quarter ended November 30, 1990.

99.4      First Amendment to the Registrant's Employee Stock
          Ownership and Tax Deferred Savings Plan.  Incorporated
          by reference to Exhibit 99.4 to the Registrant's Annual
          Report on Form 10-K for the fiscal year ended December
          31, 1993.

99.5      Second Amendment to the Registrant's Employee Stock
          Ownership and Tax Deferred Savings Plan.  Incorporated
          by reference to Exhibit 99.5 to the Registrant's Annual
          Report on Form 10-K for the fiscal year ended December
          31, 1993.