TORONTO -- Usage-based insurance programs in Ontario, also known as pay-as-you-drive, increased 37 per cent in 2020 over the year before.

In the past, people could only be rewarded for good driving with discounts on your premiums, but now one company has been granted permission to raise rates for drivers who take part in risky driving behaviour.

The Financial Services Regulatory Authority of Ontario (FSRA) recently approved a change allowing Travelers Canada Insurance to charge bad drivers a 10 per cent surcharge if they take part in what it considers risky driving.

Now that one company has been approved to charge bad drivers, more companies could also seek permission to do the same.

When someone installs a telematics device in their vehicle to monitor their driving, it records the distance they drive, their speed and how hard they brake and turn corners.

“Now this is a monumental decision that FSRA has approved which will now allow surcharges to be applied for people who exhibit bad driving behavior,” said Matt Hands, the director of insurance with

Hands said if you have one of these devices in your vehicle now that doesn't mean you will be affected, but eventually other insurance companies could also seek permission to raise rates for bad drivers.

“If you're somebody who is not convinced you are going to live up to the standards of the program, you have to be aware that now that there could be a surcharge and that these usage-based insurance programs might not be right for you,” Hands said.

In a statement Travelers Insurance told CTV News Toronto that “The IntelliDrive app allows us to personalize auto insurance pricing by basing it on an individual’s known driving behaviour. Not only can this save good drivers money, but it can also incentivize any driver who purchases the product to practice safe habits behind the wheel.”

“Once one company is allowed to do this, all will follow and they will use the same rational" said David Zweig, a professor of organizational behaviour at the University of Toronto.

Zweig deals with privacy issues and said consumers should be careful agreeing to allow their personal information to be collected by insurance companies. Zweig said drivers run the risk that their behaviours could be used against them.

“I understand the desire to reduce premiums, but you have to ask yourself at what cost? Is the fact that you are giving all this information to your insurance company worth a few dollars off your monthly premiums if the information could be used against you?" Zweig said.

No one insurance policy is the same, so if you're using usage-based or pay-as-you-drive insurance you should know how your personal information is being used and stay informed in case your policy changes to penalize bad driving.

No matter which company you're with, if you feel your rates are too high, it can pay to shop around to see if you can find lower premiums somewhere else.