A laptop is an extremely complicated piece of engineering.
If you've ever repaired laptops yourself (I do this regularly), you'll see how many things can go wrong when you disassemble a laptop.
You cannot replace the hinge without a disassembly- you cannot pull the hinge out of the laptop- you need to remove screws and open the case/ external shell.
Opening the external shell, in most laptops, will necessitate removal of cables- HDD cable, power cable, keyboard cable, audio board cable, USB board cable, card reader cable, WiFi antenna cables, figerprint scanner cables, touchpad cable, speakers cable, etc. (not all these cables in every model though- the cables removed is very much model dependent)
At the very least, your tech will need to remove the LCD cable, the Microphone cable, the Webcam cable, and the WiFi antenna cable (these cables connect the screen part of the laptop to it's keyboard part).
When he re-assembles the computer up, a loose connection somewhere might result in some failure.
He has to be absolutely SURE that ALL the cables are connected properly (connecting a laptop cable on the motherboard is not as simple as plugging in a cell phone charger to a wall outlet- the cables are super tiny, and the motherboard locks are not always tight enough to lock them properly- they won't auto-disengage while you're using the laptop, but when the laptop is open (screws removed), trying to connect one cable will often slightly nudge another cable and disconnect a part of it.
The ONLY way to test this, is to RUN the laptop for some time, maybe a couple of hours, and make sure everything works.
If you don't give him your password, he has three options:
1>Return the laptop without testing. If something is not working, you'll have to send the laptop back to him.
2>Install a fresh copy of Windows on your computer using his personal test hard drive, install ALL drivers, set up everything, and then test it. This is an extremely time-consuming process, and if I was your tech, I wouldn't even think about taking this path, unless you give me $100 extra just to test your computer.
3>Test it with a live linux distribution. The problem here is, Linux will often NOT support all the internal hardware of a laptop. If something is not working, your tech would need to waste a lot of time researching on the internet if this is a real hardware failure (loose cable somewhere) or a problem with his linux distro (bad/ missing drivers). If this is a linux induced problem, he'll again need to look for ways to fix this, download open source drivers, etc.
This again is an extremely time consuming process. It's fine if everything runs in one go, but if something doesn't, he'll spend hours trying to figure out what's going on, and to top it off, he'll be confused if the issue is a software limitation or hardware induced.
Long story short, you should give him your password.
Techs don't care about your personal data.
We don't care if you have illegal content - we're not the FBI. We don't care about your personal content (we have so many computers coming in for repairs- if we were to scour people's hard drives expecting to stumble upon something embarrassing or personal, we wouldn't be making a lot of money would we now).
And like someone said, if I really wanted to check the contents of your hard drive, I could do this very easily-even without your password.
The password is required to boot up the computer and test it, not required if my sole intention is to look up information in your hard disk.
Don't be scared of techs. Give them your password. Trust them, the same way you trust your doctor. A tech is a doctor of computers, we don't do evil!