This paper presents and experimentally verifies a method for identification of structural damage. The work is focused on such damage types as cracks, delamination or excessive allowances, which may not cause significant stiffness degradation but induce noticeable additional damping. Damaged elements are located and the damage is assessed in terms of the damage-induced damping and also the stiffness degradation. The Virtual Distortion Method (VDM) is used for modeling of the modifications.