How can you prevent woodpeckers from making holes in our cedar sided home and...
I will bet you did not know that Woodpeckers are federally protected birds and some might think you lucky to have been "chosen" as an attractive home.
Cornell has a wonderful article on why woodpeckers attack houses an it may not be for what you have guessed: that they are looking for insects but it also could be because they are making nesting or roosting spots. See this from Cornell:
There is another excellent article from Extension that goes further into what to do: http://articles.extension.org/pages/34646/how-do-i-stop-woodpeckers-from-pecking-on-my-house.
I hope these articles are helpful as well as informative.
Thank you for calling upon OSU's AskaMasterGardener and good luck.