While you are the policyholder for the auto insurance placed on the vehicle the lien holder technically still owns the vehicle until you have paid it off.

The vehicle is thus an asset that the finance company has a right to protect since they have interest in it and it is collateral. This is why the lien holder normally requires their name to be added to your policy as an additional insured.

As the financier and title holder of the car until you pay off the car in full they can be notified about damages and repairs as well as need to sign off on auto insurance checks. In a case like your hail damage they do so in order to make certain the repairs are made and that the vehicle, their asset, is fixed.

Once you are the full owner of the car then you will get to take the lien holder off your policy as an additional insured and no longer will need them to sign off on repair checks.