What does the damage icon above ships indicate?

[maillemaker]

And why do ships report as sunk before the damage indicators are depleted?

[saipan]

i think it indicates rate of flooding.

[Dogfish40]

I believe there are two bars. One is for flooding and the other is fire type damage.
When the either of the bars reaches 100% (or full), your ship should be finished. I'm not sure why your getting a sunk report before one of the damage bars gets full, but it may be just an inevitability that the ship has taken enough fire to sink it but the ship needs more time to actually go under. :hmmm:

[Webster]

the grey bar is actual damage from hit points and the blue bar is flooding damage

at some point flooding reaches a critical level (90% ish) and the ship will continue on to reach 100% and soon sink without you doing any more damage to it. the grey bar will not ever increase without you doing more damage or if the flooding reaches +90%

[maillemaker]

Is it possible to turn off the damage indicators?

Steve

[THE_MASK]

Is it possible to turn off the damage indicators?

SteveWhile in the bunker before you choose a mission hit Esc and go to the ingame options . There is an option to disable the health bars . Move your curser over the option and read the tooltips .