Floods from dam hazards pose more catastrophic consequences than equivalent flood events due to their sudden, high-speed water flows, and lack of warning. They result in the loss of human life, the destruction of communities, and significant socio-economic and environmental losses. This paper aims to review previous studies on dam hazard flood risk assessment, identify gaps in existing models, and propose a practical methodology for a sustainable assessment framework. Through a systematic literature review using keywords like “dam failure”, “flood risk”, and “socioeconomic impact”, 179 relevant papers were found, with 20 being significant, and 5 focused on dam failure events. Prior studies mostly concentrated on technical or country-based approaches, neglecting community-based assessments. The gaps identified included a lack of consideration for social, economic, and environmental impacts, with most studies focusing solely on structural effects. This study presents an integrated framework linking flood characteristics to three main variables: (1) Social-community well-being and loss of life, (2) economic losses (both direct and indirect), and (3) environmental impact on water quality and biodiversity. To assess dam failure scenarios, a guideline for scenario-building analysis is adopted, incorporating primary and secondary data. The proposed framework aims to be concrete and user-friendly, assisting policymakers and stakeholders in assessing dam hazard-flood risks. However, it acknowledges that the effectiveness of the framework may vary based on specific dam features and the surrounding demographic, topographic, and socio-economic conditions. Although a more comprehensive assessment method is necessary, this framework represents a crucial step towards improving dam risk evaluations.