Download the NYGM Ship Damage Mod, and look at the Read-Me. I have explained everything in great detail. Lots and Lots of detail with great examples.
It all depends on what you are after, if you want things to go BOOM just make the MIN & MAX big and any value that you want.
If you want to have ships that sink, then I have already done it with the NYGM Ship Damage Mod.
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