There was a gas explosion on December 20, 2007 and it resulted in 4 deaths. The town says they do not carry insurance. Is this legal?

The statute of limitations to file a notice of claim against a municipality in Louisiana is 1 year, so I assume your claim was filed on a timely basis. There is no immunity from suit or liability in contract or injury to person or property.  Although special statutes do exist to limit liability and create structured payment plans, there is a max award of $500,000 except as to medical care and loss of earnings.  The fact that the town has no insurance is not relevant to you except that the town may not have funds to cover the claims of four families for the deaths of their loved ones.  If the town is liable, they should pay.  Hopefully you all have a good personal injury attorney who has filed claims and then filed suit on your behalf.