A siding panel of a siding assembly has a nailing hem and a first upwardly opening channel connected to the nailing hem. A downwardly opening channel is connected to the first channel. An upper portion of an upper course forms a portion of the downwardly opening channel. An upper shoulder extends inwardly and upwardly from the upper course to an upper edge of a lower course. A lower shoulder extends inwardly and upwardly from a lower edge of the lower course. A planar member extending upwardly from the lower shoulder, the lower shoulder and a portion of the lower course form a second upwardly opening channel. A rib of an insulating panel is received in the first downwardly opening channel. A projection is received by the second upwardly opening channel. A shoulder abuts the upper shoulder of the siding panel.