Caulking should be used on tops of windows and where the siding meets the trim. Never, ever caulk under or between horizontal gaps because the wood must be able to expand and contract from nighttime to hot afternoon. 

Over-caulking has ruined more siding than any poor paint job or no paint job at all  When a house is over-caulked it still gets moisture inside. Then it can not dry out.

This is where we find the most wood rot. It’s usually at the bottom of wood trim where the trim meets the sill and siding that literally twists and bubbles in the paint coming from the substrate. This is steam pushing out to escape. 

I see serious damage about once a week, all stemming from one painter who thought it would look better if the siding were seamless.  A well-built house has straight seams. It is normal.  LEAVE IT ALONE.

In time, caulking loses its elasticity while the house continues to expand and contract. Then it cracks and you see jagged lines, rather than nice straight lines.

The picture on the left is a perfect example of what bad caulking can do to your trim. In this case, the trim is only 4 years old and should’ve lasted as long as the paint which normally lasts 10-15 years.

When caulking is done wrong, at worst siding has to be replaced to the tune of tens and tens of thousands of dollars to repair.   I KNOW THIS BECAUSE I HAVE TO REPLACE TRIM AND SOMETIMES SIDING.

And it was all preventable.