The capabilities of detection and localization of damage in a structure, using a guided wave-based structural health monitoring (GWSHM) system, depend on the damage location and the chosen sensor array setup. This paper presents a novel approach to assess the reliability of an SHM system enabling to quantify localization accuracy. A two-step technique is developed to combine multiple paths to generate one probability of detection (POD) curve that provides information regarding the detection capability of an SHM system at a defined damage position. Moreover, a new method is presented to analyze localization accuracy. Established probability-based diagnostic imaging using a signal correlation algorithm is used to determine the damage location. The resultant output of the localization accuracy analysis is the smallest damage size at which a defined accuracy level can be reached at a determined location. The proposed methods for determination of detection probability and localization accuracy are applied to a plate-like CFRP structure with an omega stringer with artificial damage of different sizes at different locations. The results show that the location of the damage influences the sensitivity of detection and localization accuracy for the used detection and localization methods. Localization accuracy is enhanced as it becomes closer to the array’s center, but its detection sensitivity deteriorates.