Thanks Uno. I'm a little surprised that this is standard practise, and that more people don't have a problem with it.
A few clarifications:
1. It is not a windows OS, if I gave them the passwords I have my doubts whether they'd actually be able to do anything anyway

(But this is not a windows/linux issue - I wouldn't share my password no matter the OS)
2. It's not like I have state secrets on my laptop. Just personal correspondence, financial and other personal data, and client work. And any of that that is really confidential is behind another password. But I don't understand why they'd need to look in the first place.
3. And yeah, I have backups - a week old so I'd lose a little but that is not a huge concern. I just don't see the need for them to be poking around on my hdd.