By Tom Rakocevic Downsview residents pay the highest auto insurance rates in all of Toronto. According to the Insurance Bureau of Canada, Torontonians paid an average of $1896 per year during the period 2009-2011. In York West, the federal riding stretching west from Keele to the Humber River and north from Sheppard to the city limits, the average yearly premium was a whopping $2184.Auto insurance companies take many factors into account when determining insurance rates – age, driving record, type of vehicle and level of coverage. But place of residence makes a bigger difference than you might think.The Ontario NDP conducted some simple research by calling a number of insurance companies to request a quote. With each call, the researcher gave the same driver and vehicle information, but cited a difference address. For the same forty-year old male driving a Toyota Yaris, the companies quoted premiums of $1153 in Lawrence Park, $1839 in Bramalea, $2172 in Rexdale and $2517 at Jane and Finch.So why does the same driver pay twice the premium at Jane and Finch than he would at Lawrence Park? Why does our community pay the highest auto insurance rates in Toronto? For the insurance companies, it’s all about protecting their bottom line.It's not about collision rates. According to City of Toronto collision data, Downsview area municipal wards 7 and 8 have above average collision rates, but not the highest in the city. Ward 20, in downtown Trinity-Spadina, captures that dubious honour, with over 6400 collisions during the period 2009-2011.Similarly, Downsview's Police Division 31 has higher than average rates of vehicular theft and vehicular crime, but once again fails to rank number one.However, our local community does hit the top of the charts for the highest cost per auto insurance claim. Across Toronto, the average payout is $17,900.In York West, that figure climbs to a hefty $30,000.According to Insurance Bureau of Canada, auto insurers paid out more than they collected in York West between 2009 and 2011.Raising the rates may be good for business, but it's hard on the bottom line of a community with lower than average earnings. And it's hard to swallow paying $2000 premiums when you're driving a ten year old Pontiac and not a shiny new Mercedes.Regardless of your vehicle - or your driving record - you pay a high price for living in Downsview. That may be hard to swallow, but Downsview drivers have little choice. By law, Ontario drivers must be insured. Meanwhile, auto insurers are legally entitled to use postal codes as a risk factor when calculating how much their customers will pay.It may be legal, but it's also absurd. It has nothing to do with accidents within a particular neighbourhood. If a person who lives on your street has a major car accident in northern Ontario, your premium will rise because he/she shares your postal code. If a person who lives in upscale Lawrence Park has an accident that renders them unable to work, and moves into your postal code while the insurance company is paying their rehabilitation costs, your premium may increase.This postal code prejudice saddles one of the city's poorest neighbourhoods with the highest auto insurance premiums in all of Toronto. To make matters worse, auto insurers charge these rates with the full knowledge and blessing of the Financial Services Commission of Ontario, an arm's length agency of the provincial government that regulates the auto insurance industry.Isn't the government supposed to ensure that Ontarians are treated fairly and equitably?

How does an auto insurance company determine your individual rate?Auto insurance companies employ specialized statisticians called actuaries who assess the level of risk of each new prospective client. Risk means the likelihood that a client will file a claim and the presumed amount of a claim. The higher the expected risk, the higher the premium. The best client is the individual that pays and pays but never files a claim.What factors are used to determine your rate?Actuaries use a number of factors to determine your level of risk including:

the age and type of car you drive
the level of coverage and amount of your deductable
your driving record (including prior claims and traffic offences)
the number of kilometres you drive
demographic information such as your age, gender and marital status
where you live

Who regulates auto insurance companies?The activities of auto insurance companies are regulated by the Financial Services Commission of Ontario or FSCO, an arm's length agency of Ontario's Ministry of Finance. Auto insurance companies are expected to abide by the rules of the Auto Insurance Act 1990. When calculating and raising rates, insurers provide detailed information to FSCO for approval.