SM2 : The defense from armors

I have decided which approach should I use to handle the defense from armors. But before I will tell how I implement it (yes, it's already done), allow me to bore you a bit with the explanation of the process of how I come to this. My battle mechanics look like this :

calculate if attacked unit was hit ->(if yes)->calculate damage done to target

In the Sigmore Mines 1, armor reduced only the chance to hit attacked unit, but they didn't reduce the damage done to wearer if he was hit. This was easier to balance, because I have put a rule which said that you had always a 5% chance to hit any monster, no matter how great his armor was. At the beginning I have tried to reduce damage directly by the armor factor, but if armor factor was greater then maximum damage you could made, you ended up facing monster to which you can't do any harm (or opposite situation when all monsters on the level are too weak for you).

Even if SM1 solution works, I don't feel that this was "right". In SM2 armor don't affects hit chance. It reduces damage, but not directly. Armor strength is not measured in points or class, but in percentage of how much it reduces damage. So 20% steel plate means that 20% of damage will be taken by armor. I just need to make sure that there won't be any perfect 100% armor.

In addition to this, I also look at how tall the attacker was. If you were attacked, by a rat there is no chance that you will be hit by him in your head. The opposite is also true, boots are no use if you fight with flying creature like for example bat. That also means that armor will not be cumulative. You can have super-duper adamentium plate and get killed by on hit in the unprotected head.