Presenting structural damage detection problem as an inverse model-updating approach is one of the well-known methods which can reach to informative features of damages. This paper proposes a model-based method for fault prognosis in engineering structures. A new damage-sensitive cost function is suggested by employing the main concepts of the Modal Assurance Criterion (MAC) on the first several modes’ data. Then, Chaotic Imperialist Competitive Algorithm (CICA), a modified version of the original Imperialist Competitive Algorithm (ICA) which has recently been developed for optimal design of complex trusses, is employed for solving the suggested cost function. Finally, the optimal solution of the problem is reported as damage detection results. The efficiency of the proposed method for damage identification is evaluated by studying three numerical examples of structures. Several single and multiple damage patterns are simulated and different number of modal data are utilized as input data (in noise free and noisy states) for damage detection via suggested method. Moreover, different comparative studies are carried out for evaluating the preference of the suggested method. All the obtained results emphasize the high level of accuracy of the suggested method and introduce it as a viable method for identifying not only damage locations, but also damage severities.