Do I lose the free starter ship too?

Yes, it is destroyed like any ship.

If you are left in a hub without a hull, you are issued a free replacement Seraph at Faction quality (15% less hull, armor and heat capacity than Standard).
Losing the faction starter ship also costs Merits: 25% of the ship's build rating.
It also sends you back to your faction's hub; this applies during the Faction war.
Its starter fit: a Mining Laser, an Armor Repairer, a Sonar Ping and three Flak Cannons.

Tip

Build a few spare ships before you take big risks, so a loss is a short delay rather than a restart.

Dev-confirmedBeta 1 (wipe 1)Sign in to report as outdated

Sources (9)

Speaker	Tier	Said on
fleetcommander	Developer	2 Oct 2026
phyzixteacher	Developer	1 Oct 2026

Paraphrased from the Citadel Discord. Developers and official documents are named; other players by trust tier. Last verified 2 Oct 2026 for Beta 1 (wipe 1).

Also drawn from

Citadel Wiki: Ship loss: if left in a hub with no hull you are issued a free Seraph at Faction quality
Citadel Wiki: Seraph: Faction quality gives 15% less hull, armor and heat capacity than Standard
Citadel Wiki: Merits: losing a faction starter ship costs 25% of the ship's build rating in Merits
Citadel Wiki: Merits: losing a faction-issued ship sends you home to your faction's hub
Citadel Wiki: Ship loss: Merit cost and return to faction hub are stated as applying during the Faction war
Citadel Wiki: Seraph: starter fit: Mining Laser, Armor Repairer, Sonar Ping and three Flak Cannons
Answer: Any advice for a first few runs?: build a few spare ships before taking big risks

Collected from the Citadel Discord and added on 3 Oct 2026.