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                                                                   EXHIBIT 10.18

                       NONQUALIFIED STOCK OPTION AGREEMENT
           FIRST ACCEPTANCE CORPORATION 2002 LONG TERM INCENTIVE PLAN

     1.     GRANT OF OPTION. Pursuant to the First Acceptance Corporation 2002
Long Term Incentive Plan (the "PLAN") for employees, consultants and outside
directors of First Acceptance Corporation, a Delaware corporation (the
"COMPANY"), the Company hereby grants to

                  Thomas M. Harrison, Jr. (the "PARTICIPANT"),

an option to purchase shares of Common Stock, par value $.01 per share ("COMMON
STOCK"), of the Company as follows:

     On the date hereof, the Company grants to the Participant an option (the
     "OPTION" or "STOCK OPTION") to purchase __________ full shares ("OPTIONED
     SHARES") of Common Stock at an Option Price equal to [______] DOLLARS
     ([$_____]) per share (subject to adjustment as provided in the Plan). The
     Date of Grant of this Stock Option is ___________, 2004.

The "OPTION PERIOD" shall commence on the Date of Grant and shall expire on the
date immediately preceding the tenth (10th) anniversary of the Date of Grant.
The Stock Option is a Nonqualified Stock Option.

     2.     CAPITALIZED TERMS. The capitalized terms used herein that are
defined in the Plan shall have the same meanings assigned to them in the Plan as
in effect on the date hereof; any amendments to the Plan shall not affect this
Stock Option unless agreed to in writing by the Participant. If there is a
conflict between any of the terms and provisions of this Stock Option and the
Plan, the terms and provisions of this Stock Option shall govern.

     3.     VESTING; TIME OF EXERCISE.

     (a)    Except as specifically provided in this Agreement and Section 15.6
of the Plan, the Optioned Shares shall vest, and the Stock Option shall become
exercisable, as follows:

            i.        __________ percent (___%) of the total Optioned Shares
     shall vest, and that portion of the Stock Option shall become exercisable,
     [on the first anniversary of the Date of Grant], provided the Participant
     is employed by (or, if the Participant is a consultant or an Outside
     Director, is providing services to) the Company or a Subsidiary from the
     Date of Grant to that date.

            ii.       One and two-thirds percent (1 2/3%) of the total Optioned
     Shares shall vest, and that portion of the Stock Option shall become
     exercisable, on the last day of each month subsequent to [the first
     anniversary of the Date of Grant], through and including ____________,
     200__, provided the Participant is employed by the Company or a Subsidiary
     from the Date of Grant to each such date.

            iii.      All of the Optioned Shares not previously vested shall
     immediately become fully vested, and this Stock Option shall become fully
     exercisable, if not previously exercisable, upon the effective date of the
     earliest to occur of the following: (i) a Change of Control, (ii) the
     Participant's Termination of Service by the Participant for Good Reason,
     (iii) the Participant's Termination of Service by the Company without
     Cause, or (iv) the Participant's Termination of Service due to the
     Participant's permanent disability or death in accordance with the terms of
     the Employment Agreement. For purposes of this Stock Option, "GOOD REASON,"
     and "CAUSE" shall be

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                                                                   EXHIBIT 10.18

     given the same meanings assigned to such terms in the Employment Agreement,
     dated as of _____, 2004, by and between the Company and the Participant
     (the "EMPLOYMENT AGREEMENT").

     4.     TERM; FORFEITURE. Except as otherwise provided in this Agreement,
the portion of this Option that is not exercisable, or does not become
exercisable, on the date of the Participant's Termination of Service, will,
together with the related unvested Optioned Shares, expire, terminate, and be
forfeited on that date. The exercisable portion of the Stock Option that relates
to Optioned Shares that are or become vested on the date of the Participant's
Termination of Service, will terminate and be forfeited at the first of the
following to occur:

            (a)       5 p.m. on the date the Option Period terminates;

            (b)       5 p.m. on the date that is twelve (12) months following
     the Participant's Termination of Service by the Company for Cause; or

            (c)       5 p.m. on the date that is twenty-four (24) months
     following the date of the Participant's Termination of Service for any
     reason other than by the Company for Cause, including a Termination of
     Service due to the Participant's death or disability, Termination of the
     Service by the Participant with or without Good Reason, and Termination of
     Service by the Company without Cause.

     5.     WHO MAY EXERCISE. Subject to the terms and conditions set forth in
SECTIONS 3 and 4 above, during the lifetime of the Participant, the Stock Option
may be exercised only by the Participant, or by the Participant's guardian or
personal or legal representative, or by any transferee as permitted under
SECTION 8 herein. If the Participant's Termination of Service is due to his
death prior to the date specified in SECTION 4(a) hereof, or the Participant
dies prior to the termination dates specified in SECTIONS 4(a) - (c) hereof, and
the Participant has not exercised the Stock Option as to the maximum number of
vested Optioned Shares as set forth in SECTION 3 hereof as of the date of death,
the following persons may exercise the exercisable portion of the Stock Option
on behalf of the Participant at any time prior to the earliest of the dates
specified in SECTION 4 hereof: the personal representative of his estate, or the
person who acquired the right to exercise the Stock Option by bequest or
inheritance or by reason of the death of the Participant or a transferee as
permitted in SECTION 8 herein; provided that the Stock Option shall remain
subject to the other terms of this Agreement, Section 15.6 of the Plan and
applicable laws, rules, and regulations.

     6.     NO FRACTIONAL SHARES. The Stock Option may be exercised only with
respect to full shares, and no fractional share of stock shall be issued.

     7.     MANNER OF EXERCISE. Subject to such administrative regulations as
the Committee may from time to time adopt, the Stock Option may be exercised by
the delivery of written notice to the Committee setting forth the number of
shares of Common Stock with respect to which the Stock Option is to be
exercised, the date of exercise thereof (the "EXERCISE DATE") which shall be the
day upon which such notice is given in accordance herewith. On the Exercise
Date, the Participant shall deliver to the Company consideration with a value
equal to the total Option Price of the shares to be purchased, payable as
follows: (a) cash, check, bank draft, or money order payable to the order of the
Company, (b) Common Stock owned by the Participant on the Exercise Date, valued
at its Fair Market Value on the Exercise Date, and which the Participant has not
acquired from the Company within six (6) months prior to the Exercise Date, (c)
if the Optioned Shares are other than Nonpublicly Traded, by delivery (including
by FAX) to the Company or its designated agent of an executed irrevocable option
exercise form together with irrevocable instructions from the Participant to a
broker or dealer, reasonably acceptable to the Company, to sell certain of the
shares of Common Stock purchased upon exercise of the Stock Option or to pledge
such shares as collateral for a loan and promptly deliver to the

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                                                                   EXHIBIT 10.18

Company the amount of sale or loan proceeds necessary to pay such purchase
price, and/or (d) in any other form of valid consideration that is acceptable to
the Committee in its sole discretion.

     Upon payment of all amounts due from the Participant, the Company shall
cause certificates for the Optioned Shares then being purchased to be delivered
to the Participant (or the person exercising the Participant's Stock Option in
the event of his death) at its principal business office as soon as practicable
(but in no case more than three (3) days) after the Exercise Date in order to
permit timely sales under applicable exchange rules or to permit timely
participation in any liquidity event. The obligation of the Company to deliver
shares of Common Stock shall, however, be subject to the condition that if at
any time the Company shall determine in its discretion that the listing,
registration, or qualification of the Stock Option or the Optioned Shares upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary as a condition of, or
in connection with, the Stock Option or the issuance or purchase of shares of
Common Stock thereunder, then the Stock Option may not be exercised in whole or
in part unless such listing, registration, qualification, consent, or approval
shall have been effected or obtained free of any conditions not reasonably
acceptable to the Committee.

     8.     TRANSFER AND ASSIGNMENT. Except as otherwise provided in this
SECTION 8, this Stock Option may not be assigned, transferred, pledged,
hypothecated, or otherwise conveyed or encumbered by the Participant, except by
will or by the laws of descent and distribution. Notwithstanding the foregoing,
this Stock Option may be transferred, assigned or otherwise conveyed to (i) any
of the Participant's Immediate Family Members, (ii) a trust or trusts for the
exclusive benefit of such Immediate Family Members, (iii) a partnership in which
the only partners are (1) such Immediate Family Members and/or (2) entities, a
majority of the beneficial ownership of which is owned by Immediate Family
Members, (iv) an entity exempt from federal income tax pursuant to Section
501(c)(3) of the Code, or (v) a split interest trust or pooled income fund
described in Section 2522(c)(2) of the Code; provided, that (x) there shall be
no consideration for any such transfer, (y) subsequent transfers may not be made
hereunder except those by will or the laws of decent and distribution, and (z) a
Termination of Service of Participant shall continue to have the effects in
SECTIONS 3 and 4 as if Participant had not transferred, assigned or otherwise
conveyed this Stock Option.

     9.     RIGHTS AS STOCKHOLDER. The Participant will have no rights as a
stockholder with respect to any shares covered by the Stock Option until the
issuance of a certificate or certificates to the Participant for the Optioned
Shares, subject to the Company's obligation to issue such certificate(s) as soon
as practicable in accordance with SECTION 7 above. The Optioned Shares shall be
subject to the terms and conditions of this Agreement regarding such Optioned
Shares. Except as otherwise provided in SECTION 10 hereof, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
issuance of such certificate or certificates.

     10.    ADJUSTMENT OF NUMBER OF OPTIONED SHARES AND RELATED MATTERS. The
number of shares of Common Stock covered by the Stock Option, and the Option
Prices thereof, shall be subject to adjustment in accordance with
ARTICLES 11 - 13 of the Plan.

     11.    NONQUALIFIED STOCK OPTION. The Stock Option shall not be treated as
an Incentive Stock Option.

     12.    VOTING. The Participant, as record holder of some or all of the
Optioned Shares following exercise of this Stock Option, has the exclusive right
to vote, or consent with respect to, such Optioned Shares until such time as the
Optioned Shares are transferred in accordance with this Agreement; PROVIDED,
HOWEVER, that this Section shall not create any voting right where the holders
of such Optioned Shares otherwise have no such right.

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                                                                   EXHIBIT 10.18

     13.    COMMUNITY PROPERTY. Each spouse individually is bound by, and such
spouse's interest, if any, in any Optioned Shares is subject to, the terms of
this Agreement. Nothing in this Agreement shall create a community property
interest where none otherwise exists.

     14.    DISPUTE RESOLUTION. Any dispute, controversy or claim arising out of
or in relation to or in connection with this Agreement, including without
limitation any dispute as to the construction, validity, interpretation,
enforceability or breach of this Agreement, shall be exclusively and finally
settled by arbitration, and any party may submit such dispute, controversy or
claim, including a claim for indemnification under this SECTION 14, to
arbitration.

            (a)       ARBITRATORS. The arbitration shall be heard and determined
     by one arbitrator, who shall be impartial and who shall be selected by
     mutual agreement of the parties; provided, however, that if the dispute
     involves more than $2,000,000, then the arbitration shall be heard and
     determined by three (3) arbitrators. If three (3) arbitrators are necessary
     as provided above, then (i) each side shall appoint an arbitrator of its
     choice within thirty (30) days of the submission of a notice of arbitration
     and (ii) the party-appointed arbitrators shall in turn appoint a presiding
     arbitrator of the tribunal within thirty (30) days following the
     appointment of the last party-appointed arbitrator. If (x) the parties
     cannot agree on the sole arbitrator, (y) one party refuses to appoint its
     party-appointed arbitrator within said thirty (30) day period or (z) the
     party-appointed arbitrators cannot reach agreement on a presiding
     arbitrator of the tribunal, then the appointing authority for the
     implementation of such procedure shall be the Senior United States District
     Judge for the Northern District of Illinois, who shall appoint an
     independent arbitrator who does not have any financial interest in the
     dispute, controversy or claim. If the Senior United States District Judge
     for the Northern District of Illinois refuses or fails to act as the
     appointing authority within ninety (90) days after being requested to do
     so, then the appointing authority shall be the Chief Executive Officer of
     the American Arbitration Association, who shall appoint an independent
     arbitrator who does not have any financial interest in the dispute,
     controversy or claim. All decisions and awards by the arbitration tribunal
     shall be made by majority vote.

            (b)       PROCEEDINGS. Unless otherwise expressly agreed in writing
     by the parties to the arbitration proceedings:

                      (i)       The arbitration proceedings shall be held in
            Chicago, Illinois, at a site chosen by mutual agreement of the
            parties, or if the parties cannot reach agreement on a location
            within thirty (30) days of the appointment of the last arbitrator,
            then at a site in Chicago, Illinois chosen by the arbitrator(s);

                      (ii)      The arbitrator(s) shall be and remain at all
            times wholly independent and impartial;

                      (iii)     The arbitration proceedings shall be conducted
            in accordance with the Commercial Arbitration Rules of the American
            Arbitration Association, as amended from time to time;

                      (iv)      Any procedural issues not determined under the
            arbitral rules selected pursuant to item (iii) above shall be
            determined by the law of the place of arbitration, other than those
            laws which would refer the matter to another jurisdiction;

                      (v)       The costs of the arbitration proceedings
            (including reasonable attorneys' fees and costs) shall be borne in
            the manner determined by the arbitrator(s);

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                                                                   EXHIBIT 10.18

                      (vi)      The decision of the arbitrator(s) shall be
            reduced to writing; final and binding without the right of appeal;
            the sole and exclusive remedy regarding any claims, counterclaims,
            issues or accounting presented to the arbitrator(s); made and
            promptly paid in United States dollars free of any deduction or
            offset; and any costs or fees incident to enforcing the award shall,
            to the maximum extent permitted by law, be charged against the party
            resisting such enforcement;

                      (vii)     The award shall include interest from the date
            of any breach or violation of this Agreement, as determined by the
            arbitral award, and from the date of the award until paid in full,
            at 6% per annum; and

                      (viii)    Judgment upon the award may be entered in any
            court having jurisdiction over the person or the assets of the party
            owing the judgment or application may be made to such court for a
            judicial acceptance of the award and an order of enforcement, as the
            case may be.

            (c)       ACKNOWLEDGMENT OF PARTIES. Each party acknowledges that he
     or it has voluntarily and knowingly entered into an agreement to
     arbitration under this SECTION 14 by executing this Agreement.

     15.    PARTICIPANT'S REPRESENTATIONS. Notwithstanding any of the provisions
hereof, the Participant hereby agrees that he will not exercise the Stock Option
granted hereby, and that the Company will not be obligated to issue any shares
to the Participant hereunder, if the exercise thereof or the issuance of such
shares shall constitute a violation by the Participant or the Company of any
provision of any law or regulation of any governmental authority or any rule of
any stock exchange or inter-dealer quotation system on which such shares are
listed or traded, provided that the foregoing shall not be deemed to be a
limitation of any other obligation of the Company hereunder.

     16.    INVESTMENT REPRESENTATION. Unless the Common Stock is issued to him
in a transaction registered under applicable federal and state securities laws,
by his execution hereof, the Participant represents and warrants to the Company
that all Common Stock which may be purchased hereunder will be acquired by the
Participant for investment purposes for his own account and not with any intent
for resale or distribution in violation of federal or state securities laws.
Unless the Common Stock is issued to him in a transaction registered under the
applicable federal and state securities laws, all certificates issued with
respect to the Common Stock shall bear an appropriate restrictive investment
legend and shall be held indefinitely, unless they are subsequently registered
under the applicable federal and state securities laws or the Participant
obtains an opinion of counsel, in form and substance satisfactory to the Company
and its counsel, that such registration is not required.

     17.    LOCK UP. In connection with an underwritten public offering of
Common Stock, upon the request of the Company or the principal underwriter
managing such public offering, no shares of Common Stock received by the
Participant under this Award Agreement may be sold, offered for sale or
otherwise disposed of without the prior written consent of the Company or such
underwriter, as the case may be, for up to one hundred eighty (180) days after
the effectiveness of the registration statement filed in connection with such
offering, if all of the Company's directors and officers agree to be similarly
bound, and releases from any and all lock-up agreements in connection with such
offering are granted on a pro-rata basis.

     18.    PARTICIPANT'S ACKNOWLEDGMENTS. The Participant acknowledges receipt
of a copy of the Plan, which is annexed hereto, and represents that he or she is
familiar with the terms and provisions thereof.

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                                                                   EXHIBIT 10.18

     19.    LAW GOVERNING. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Delaware (excluding any
conflict of laws rule or principle of Delaware law that might refer the
governance, construction, or interpretation of this agreement to the laws of
another state).

     20.    NO RIGHT TO CONTINUE SERVICE OR EMPLOYMENT. Nothing herein shall be
construed to confer upon the Participant the right to continue in the employ or
to provide services to the Company or any Subsidiary, whether as an employee or
as a consultant or as an Outside Director, or interfere with or restrict in any
way the right of the Company or any Subsidiary to discharge the Participant as
an employee, consultant or Outside Director at any time.

     21.    LEGAL CONSTRUCTION. In the event that any one or more of the terms,
provisions, or agreements that are contained in this Agreement shall be held by
a Court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect for any reason, the invalid, illegal, or unenforceable term,
provision, or agreement shall not affect any other term, provision, or agreement
that is contained in this Agreement and this Agreement shall be construed in all
respects as if the invalid, illegal, or unenforceable term, provision, or
agreement had never been contained herein.

     22.    COVENANTS AND AGREEMENTS AS INDEPENDENT AGREEMENTS. Each of the
covenants and agreements that is set forth in this Agreement shall be construed
as a covenant and agreement independent of any other provision of this
Agreement. The existence of any claim or cause of action of the Participant
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of the covenants and
agreements that are set forth in this Agreement.

     23.    ENTIRE AGREEMENT. This Agreement, together with the Plan, supersde
any and all other prior understandings and agreements, either oral or in
writing, between the parties with respect to the subject matter hereof and
constitute the sole and only agreements between the parties with respect to the
said subject matter. All prior negotiations and agreements between the parties
with respect to the subject matter hereof are merged into this Agreement and the
Plan. Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have been made by any
party or by anyone acting on behalf of any party, which are not embodied in this
Agreement or the Plan and that any agreement, statement or promise that is not
contained in this Agreement or the Plan shall not be valid or binding or of any
force or effect.

     24.    PARTIES BOUND. The terms, provisions, and agreements that are
contained in this Agreement shall apply to, be binding upon, and inure to the
benefit of the parties and their respective heirs, executors, administrators,
legal representatives, and permitted successors and assigns, subject to the
limitation on assignment expressly set forth herein.

     25.    MODIFICATION. No change or modification of this Agreement shall be
valid or binding upon the parties unless the change or modification is in
writing and signed by the parties.

     26.    HEADINGS. The headings that are used in this Agreement are used for
reference and convenience purposes only and do not constitute substantive
matters to be considered in construing the terms and provisions of this
Agreement.

     27.    GENDER AND NUMBER. Words of any gender used in this Agreement shall
be held and construed to include any other gender, and words in the singular
number shall be held to include the plural, and vice versa, unless the context
requires otherwise.

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                                                                   EXHIBIT 10.18

     28.    NOTICE. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered only when actually received by the Company or by
the Participant, as the case may be, at the addresses set forth below, or at
such other addresses as they have theretofore specified by written notice
delivered in accordance herewith:

            a.        Notice to the Company shall be addressed and delivered as
     follows:

                      First Acceptance Corporation
                      3813 Green Hills Village Drive
                      Nashville, Tennessee 37215
                      Attn: Secretary
                      Facsimile: (615) 844-2898

            b.        Notice to the Participant shall be addressed and delivered
     as set forth on the signature page.

     29.    TAX REQUIREMENTS. The Participant, upon exercise of any portion of
the Stock Option, shall be required to pay the Company the amount of all taxes
which the Company is required to withhold as a result of the exercise of the
Stock Option; such obligation to pay such taxes may be satisfied by any of the
following or any combination thereof: (a) the delivery of cash to the Company in
an amount that equals or exceeds (to avoid the issuance of fractional shares
under (c) below) the required tax withholding obligation of the Company; (b) if
the Company, in its sole discretion, so consents in writing, the actual delivery
by the exercising Participant to the Company of shares of Common Stock other
than (i) Restricted Stock or (ii) Common Stock that the Participant owns but has
acquired from the Company within six months prior to the date of exercise, which
shares so delivered have an aggregate Fair Market Value that equals or exceeds
(to avoid the issuance of fractional shares under (c) below) the required tax
withholding payment; or (c) the Company's withholding of a number of shares to
be delivered upon the exercise of the Stock Option, which shares so withheld
have an aggregate Fair Market Value that equals (but does not exceed) the
required tax withholding payment; provided that, shares cannot be withheld in
connection with the exercise of a Stock Option in excess of the minimum number
required for tax withholding, and to permit the Stock Option to be accounted for
as a fixed award. Any such withholding payments with respect to the exercise of
any portion of the Stock Option in cash or by actual delivery of shares of
Common Stock shall be required to be made within thirty (30) days after the
delivery to the Participant of any certificate representing the shares of Common
Stock acquired upon exercise of the Stock Option. The Company may, in its
discretion, withhold such taxes from any other remuneration paid by the Company
or a Subsidiary to the Participant.

     30.    OPTION CASH-OUT. The Company may only make provisions for a cash
payment to the holder of this Stock Option, as contemplated by Article 11 or
Section 12.3 of the Plan, in the event and subject to the consummation of the
sale of substantially all of the assets or capital stock of the Company for
cash.

     31.    FAILURE TO PAY OPTION PRICE; NOTICE TO PARTICIPANT. Section 8.3(c)
of the Plan shall not apply to this Option unless the Participant receives from
the Company written notice of an event giving rise to the forfeiture right
described in Section 8.3(c) of the Plan and the Participant fails to cure such
event within five (5) days after his receipt of such notice.


                                 * * * * * * * *

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                                                                   EXHIBIT 10.18

     IN WITNESS WHEREOF, the Company has caused this Award Agreement to be
executed by its duly authorized officer, and the Participant, to evidence his
consent and approval of all the terms hereof, has duly executed this Agreement,
as of the date specified in SECTION 1 hereof.

                                     FIRST ACCEPTANCE CORPORATION:


                                     By:
                                           -------------------------------------


                                     -------------------------------------------
                                     Thomas M. Harrison, Jr.

                                     Address: