I'm using the suggested alternative rules from Unearthed Arcana (p112) to emulate a slightly more realistic way to use armour, with a couple of changes.
The idea is that a character's Armor Class (AC) gained from body armour also converts a portion of damage daten to nonlethal damage; with a few modifications to work with nonlethal damage rules. This will more often mean heavily armoured characters are knocked unconscious than killed outright. The winning characters will then have to choose between murdering their foe in cold blood after the battle or do something else with their unconscious foe. It also shows that wearing armour actually does absorb a lot of damage.
The healing house rules also play in to balance the rules.
Damage Conversion Rules
- Each point of AC count as 1 point of damage reduction for physical damage.
- Includes only AC from body armour as well as enhancement bonuses and natural armor class bonus.
- Does not include shield bonus or deflection bonus.
- Each point absorbed by the armour is instead recieved as nonlethal damage.
- Nonlethal damage acquired in this manner is recieved as if it was lethal damage by regenerating creatures (in essence: the two buffs do not stack).
- This nonlethal damage is healed in the same manner as letal damage.
- This nonlethal damage is healed after all points of lethal damage is healed last by regenerating creatures or creatures with healing.
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This include a short excerpt from Unearthed Arcana (page 122) that is not under the normal copyright of the wiki and is used in good faith.
Damage Conversion in Unearthed Arcana
Armor, in addition to adding a bonus to AC, also converts lethal damage from physical attacks into nonlethal damage. (Shields provide a shield bonus to AC, as normal, but do not convert damage.)
Each time an armor-wearing character is struck by an attack that deals lethal damage, the amount of damage dealt to the character is reduced by an amount equal to the armor bonus (including enhancement) of the armor worn. The character takes an equal amount of nonlethal damage. Damage that is not affected by damage reduction (energy damage and the like) is not converted.
For example, while wearing +1 full plate (total armor bonus +9), Tordek is struck by an arrow for 6 points of damage. Since the armor can convert up to 9 points of damage per attack, the entire 6 points is converted from lethal damage to nonlethal damage. Tordek’s hit point total remains the same, but he increases his nonlethal damage total by 6 points. Later, a hill giant strikes Tordek for a whopping 22 points of damage. The armor converts 9 points of this damage to nonlethal damage, but the remaining 13 points are deducted from Tordek’s hit points.
Nonlethal Damage: An armor-wearing character can ignore nonlethal damage equal to his armor bonus. (In effect, armor grants damage reduction equal to its armor bonus against nonlethal attacks.)
Natural Armor: At your option, you can make natural armor work in the same manner. However, this means that almost no defeated monster is truly dead, which may prove problematic (see the Behind the Curtain sidebar). This rule also interacts strangely with regeneration—since all damage dealt to a creature with regeneration is treated as nonlethal damage, a regenerating creature with armor or natural armor actually takes less damage than normal when using this system. In the case of regenerating creatures, consider eliminating the rule that natural armor works in the same manner.