Structural Health Monitoring (SHM) enables assessing in-service structures’ performance by localizing structural anomaly instances immediately after their occurrence. Typical SHM approaches monitor the entire structural spatial domain aggravating the required density and cost of instrumentation. Further, with model-based approaches, the entire structural domain is needed to be defined with high dimensional, compute-intensive models rendering the SHM approaches ill-posed and slow especially when the instrumentation is limited and system observability is compromised. Moreover, in absence of high-fidelity models, oversimplification and subsequent model inaccuracies may lead to inaccurate estimation and possibly false alarms even if a subdomain is modeled inaccurately, e.g. support boundaries. To mitigate such issues, stand-alone monitoring focusing only on a subdomain of interest may be a computationally cheaper and prompt approach while being substantially robust to false alarms. Typically, such stand-alone substructure monitoring approaches demand extensive measurement of the interface, which can be a challenge in real-life applications. This paper presents a novel filtering-based online time domain approach for estimating substructure parameters without the need to measure or estimate the substructure interfaces. The proposed component-wise estimation is stand-alone so that the health estimation of the complete structural domain can be undertaken in parallel and later coupled through post-processing. The requirement of the interface measurement has been alleviated by employing an output injection approach. The proposal has been validated on a numerical beam structure subjected to arbitrary forces and subsequently, the sensitivity against noise and damage severity of the proposal has been investigated. Finally, the proposal is validated on a real beam to illustrate its real-life applicability and significance.