This study introduces a new method based on wavelet coefficients to detect structural damages caused by earthquakes. While past research has suggested that the presence of spikes in wavelet analysis details might indicate damage, this study emphasizes that spikes, in certain cases, do not necessarily imply structural damage, thus revealing limitations in current methods. The proposed method utilizes the variance between normalized wavelet decomposition coefficients of undamaged and damaged structures. The variance is computed at each time point, and its integration from time zero to t serves as a parameter sensitive o damage. Abrupt changes in the damage-sensitive parameter curve occur because of spikes in the wavelet decomposition coefficients. Structural damage is inferred if the damage-sensitive parameter exceeds 1 at the end of the earthquake. The validation of the proposed method includes numerical modeling of structures and nonlinear time history analysis under earthquake records, where the occurrence of plastic hinges in the structure is considered as damage. The method is applied to two structures—one with three stories and another with eight stories—both designed nonlinearly with concentrated plastic hinges. The cross-verification of results using three earthquake records shows how effective the effective the proposed method in at identifying structural damage