Farmers Insurance to Launch 5-Year Sales Effort in Inner Cities : Marketing: The company hopes to outdo competitors, while admitting its outreach, not prices alone, has hindered past sales.

Farmers Insurance Co. said Friday that it will launch an intensive, five-year effort to boost its sales in inner-city areas that have long been overlooked by insurers.

The statewide effort, which initially will focus on homeowners and business insurance, represents a challenge to some of the industry’s prevailing beliefs about why certain neighborhoods are underinsured.

“It’s not an availability problem, it’s an affordability problem” is a theme often sounded by insurance executives in rebutting accusations of redlining, or sales discrimination.

But by committing itself to putting more agents on the inner-city streets and using multilingual advertising and promotion, Farmers--California’s second-largest property-casualty insurer--said it is acknowledging that price is not the only reason lower-income areas don’t buy much insurance.

“There’s a market out there that hasn’t been developed as well as it could be,” Farmers Vice President Jeffrey Beyer said. “We think whoever does it first and does it right is going to own it.”

In a news conference Friday morning outside Farmers’ Mid-Wilshire headquarters, state Insurance Commissioner John Garamendi said there are affordability problems too. He joined Farmers executives in asking the Legislature to allow the sale of a low-priced, no-fault auto insurance policy--legislation that has never gotten far in Sacramento.

William H. Braddock, Farmers executive vice president, said the company has not yet set a budget for the new initiative, which is still in the planning stages. Farmers is also conducting a demographic study to determine exactly which areas are underserved.

Farmers said it expects to establish a toll-free number for non-English-speaking customers.

To bolster its agent force in underserved neighborhoods, Farmers will consider changing its hiring criteria and training methods, Braddock said. It also plans to step up its advertising in non-English media and to develop new ways of marketing to cultural groups that may not be familiar with insurance products.

One tangible element of the new program is a $40,000 donation that Farmers made Friday to Los Angeles Neighborhood Housing Services, a nonprofit housing development organization. Lori R. Gay, the group’s president, said the money will buy smoke detectors, deadbolt locks, floodlights and other equipment that reduces risk in homes and businesses.