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All Armour (Unarmoured, Light, Medium, Heavy) basically just acts like Damage Reduction. This includes Unarmoured , which is falsely described in-game as inceasing dodge chance . Increasing skill points out into Armour effects the Armour Rating you’ll get whilst using a certain type of armour.
The formulae are all in the link above. Without getting too much into all the extra stuff that effects damage, the general formula for the ‘Damage Reduction multiplier’ is:
(1 + Armour Rating) / Damage, with a max value of 4.
Basically, Damage can be reduced by up to 75%, or ‘1/4 Damage taken’.
The amount of damage reduced depends both on the Rating AND the damage, meaning that Low Armour ratings successfully reduce low amounts of damage (Max AR required to max reduce ‘1 damage’ by 75% is 3), but higher Armour Ratings are required to reduce high amounts of Damage (Max AR required to reduce ‘100 Damage’ by 75% is 399).
Most creatures on the mainlands deal 1-50 Damage . It’s only really in the Expansions or in mods that you will find enemies that consistently deal more than this.
Unless you play the Morrowind Hardcore Mod ;)
Edited. 😛