Ship collisions and groundings are important due to their severe consequences, including exceedance of ultimate strength, loss of stability, and spillage of hazardous cargo and liquids. To mitigate these effects, cost-efficient simulation tools are needed for studying transient flooding and motions of damaged ships with different damage opening characteristics in a wave environment. The objective of this study is to present a validation of a liquid exchange model implemented in the time-domain-based dynamic ship stability simulation code SIMCAP, using experiments presented in the literature. The validated model was then applied in a parametric study of a fully loaded double-hull oil tanker damaged in the inner and outer hulls. Oil outflow, water inflow, and ship motions were analysed for different damage opening positions, shapes, and wave heights. The results showed that the damage location strongly affected the oil outflow. The oil spill rate increased with wave height but was relatively unaffected by heading and wave realization. In conclusion, SIMCAP was reasonably validated qualitatively and quantitatively and is suitable for investigating key physical mechanisms in parametric studies of damaged ships in waves.