Monday, August 24, 2015

Understand Excess Reduction in Car Rental

You may or may not know about this excess reduction in car rental every time when you are travelling. In fact, a lot of people misunderstand that this in an insurance and I'm confused myself too when first I started renting car here in Australia.

In fact, this is NOT an insurance at all but maybe it can be related to insurance. For example, if you don't pay for this excess reduction, you're still insured. In case of anything happens, the maximum amount that you need to pay is $4K. No matter what happen, you won't pay more than $4K. Isn't this already covered?

You pay this excess reduction fee to reduce the $4K to $500 for example. So, in case of anything happens, you won't pay more than $500. You can also pay this access reduction fee higher to reduce the $4K to $0 so that you won't pay a single cents.

There is a catch here, you still won't be covered although you have reduce to excess to $0. For example, you break the rental contract by driving in the unsealed road.  This depends on whether there is such limitation on the contract and also depends on place that you rent a car. We have such limitation while renting a car in Tasmania. They usually will explain that to you clearly.

Another common thing is you don't drive the car but let other to drive. It depends on you contract whether you have added another person to drive the car or only you're the only one can drive the the car. Also, violating traffic laws is another common one which causes you break the contract.

Should you pay for this excess reduction? It is really up to you. What you should ask yourself is if there is any major accidental happens, are you afford to pay $4k? If yes, you don't need to pay any excess reduction fee. I personally have never paid for it. Most importantly, don't "assume" this excess reduction is an insurance fee, it is NOT. You have already been covered although you don't pay it!

Friday, July 24, 2015

Beware of Non-compete Clause in Your Offer Letter

This is something I learned lately while searching for a job especially for the job that posted by my company's competitor. So the conversation goes like that:

HR: What is your limitation?

Me: I don't have any limitation. I'm a full time permanent employee. I just need to give  4 weeks notice.

HR: No, I mean limitation such as what is the period you're not allow to join our company due to non-competition contract.

Me: Huh? I'm not sure about that but I believe is none. I need to go back and look at my offer letter and get back to you.

HR: Yes, give me a call when you find it out.

So I went back home and checked. You need to search for this few keywords (e.g. non-compete, non-competition) in your offer letter. It turns out that I can't join any of my company competitors in NSW after 12 months I leave my current company. So I called him back the day after. Since I was not 100% sure, I also copied the clause and sent it to him in email to confirm.

ME: I think if I understand it correctly, in my offer letter, I'm not allow to join your company within 12 months after I resign. I send the clause to you, can you please help to confirm?

HR: Yes, you understand correctly but normally employer can only hold an employee not more than 3 months and they can't stand legally to hold you for 12 months. Can you no working for 3 months? You can join our company after 3 months. You may also want to check with your lawyer.

Me: Let me think about it and I will get back to you.

I think for a while, I think it is not worth to take such risk. Furthermore, I can't be jobless for 3 months. So I decided not proceed with it. The HR called me back after few days I didn't get back to him, and I had no choice telling him not to proceed. So sad!

Key Learning

  • Read your offer letter carefully especially on non-compete clause
  • Negotiate to change or remove the non-compete clause in the offer letter
Sometimes it also depends on whether you are at right position to negotiate because you may lose the job. I will say as long as you're employed, you should negotiate this. I definitely will do it next. Ultimately  I want to remove this clause completely and if can't, I will aim to reduce the period to 1 month.
But now, I'm stuck...

P/S: I ask around people here it turns out employer suing an employee for non-compete clause is common here. So luckily, I didn't take the risk.

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