“The increases will have a devastating impact effective immediately,” Donelon said. “Homeowners have to have flood insurance to protect their investment, even if they have no mortgage. These rate increases will render thousands of properties worthless because insurance rates will be going up so dramatically and suddenly.”

He said the increases would make it almost impossible for owners to sell thousands of properties outside the New Orleans region's federal levee system because the entire rate increase would go into effect immediately if a property is sold.

Billy Ward, president of the Louisiana Home Builders Association, has told local publications that some property owners could see rate increases of 4,000 percent.

Donelon was in Washington last week to answer questions posed by the Government Accountability Office. The GAO is mandated by the 2012 law that reauthorized the NFIP for five years to conduct a study on the feasibility of privatizing the program.

Donelon said he told the GAO that the “The NFIP is more important for Louisiana than any other state.”

But, he said, by rendering thousands of coastal properties worthless because, overnight, their owners will not able to afford flood insurance coverage, he believes the program should be scrapped.

A more appropriate alternative is for the government to create a catastrophe, flood and earthquake reinsurance program as a backup to the current homeowners insurance program, he said.

Congress, however, has repeatedly rejected such proposals. For example, legislation creating such a program, the Homeowners Defense Act, was introduced every year for four years by a Palm Beach, Fla., Democrat who was defeated in the 2010 wave election.

Sen. Bill Nelson, D-Fla., recently reintroduced the legislation. It is colloquially denigrated by conservative economists as the “Beach House bailout” law.

But Donelon defended such an approach. “It would provide a backstop for traditional coverage as existed decades ago, before creation of the NFIP, and allow an expansion of homeowners' and commercial insurance,” Donelon said.

“That is what should be done long-term,” Donelon added. “But I am open to other suggestions as well because this is definitely a threat to our state's economy.”

Donelon said that primary residences and commercial property along Louisiana's coast are of the biggest concern.

“We have few second homes; very little beachfront properties,” Donelon said. “The properties impacted by this are the primary residences of our 'working coast,' — those of fisherman, oilfield workers, onshore and offshore, dock workers, etc. and their commercial businesses,” Donelon said. He said these included grocery stores, fire stations, schools, and the teachers and police who serve the coastal areas.

Sen. Mary Landrieu, D-La., has introduced legislation that would delay the onset of the new rates for some properties for one year.

Legislation containing such a provision has been reported out by the Senate Appropriations Committee. However, given the gridlock in Congress, it is unlikely to be enacted. Moreover, critical members of both the House and Senate have indicated that they would oppose any changes to the 2012 law, the Biggert-Waters Act.