Of course it should.
If you live and drive in the Toronto area you have a much higher chance of A:/ theft or break in B:/ getting in an accident due to the much busier roadways than say me who lives in an area with 18,000 people. The city of Toronto has about 150X the population of Yellowknife. If you also take into account the number of people in the surrounding area (GTA) as they drive the same roads, the number increases to 300X the amount of people.
Lets just pretend all of the people in both cities drive. You could surmise that people in the GTA are 300X more likely to make an insurance claim than someone in Yellowknife.
Se where I'm going with this?
So even though you're 300X more likely to make a claim than I am you aren't paying 300X what I am.
But if you live in an area with increased probability of having to make a claim you should have to pay more. It's an increased risk, no different than the guy with 4 tickets who pays more than the fellow with a clean driving record, or the 18 year old kid who is much more likely to get in an accident than the 50 year old father of three.
Insurance rates are based on risk and where you live either increases or decreases your risk.
Lesson over.