The Great fire of Hamburg began early on May 5, 1842 in Deichstraße and burned until the morning of May 8, destroying about one third of the buildings in the Altstadt. 51 people were killed and 1,700 residences and several important public buildings were destroyed. The fire required major rebuilding of the city and led to improvements in its infrastructure. The heavy demand on insurance companies also led to the establishment of reinsurance.
The fire began in Eduard Cohen's cigar factory at Deichstraße 42 or 44 early in the morning of May 5, 1842; a neighbor alerted the night watch at about 1 a.m. It quickly spread to number 25, across the street. The weather had been unusually dry, and the wind was strong and changeable. Hamburg had fire lookouts on church towers, known as Türmer, in addition to night watchmen who had horns to sound to report a fire, and a code by which church bells reported the location and severity of fires. Volunteer teams of firefighters competed to earn a premium by being first to reach a fire. However, the city was dense with wooden and half-timbered houses, which tended to be tall and narrow, reflecting the shape of the building plots, and merchants operated their businesses out of their houses, so that many included warehouses containing flammables such as rubber and shellac. In addition the provision of water for firefighting, from the Elbe and canals, was inefficient: low water (and freezing in winter) made pumping difficult, and the leather hoses would not slide on ladders, so that water could not be pumped above ground level. By daybreak much of the Altstadt was on fire.
As the fire continued to burn, collapsed buildings prevented fireboats from using the canals, and there was no system to coordinate the firefighters from different parishes. Firefighters from outside the city, as far away as Lübeck and Kiel, joined the effort. Some buildings were blown up in an attempt to create firebreaks, including the old Rathaus (city hall), originally built in 1290; 18 wagonloads of records were salvaged from it first. May 5 was Ascension Day; a few hours after the midday feastday service, despite strenuous efforts, the spire of the Nikolaikirche collapsed, and the church burned down. There was panic and extensive looting; the militia aided in the firefighting until it had to combat looting instead. About half the population, some 70,000 people, fled.