Is religion necessary?

Being an atheist, religious people automatically assume I have no morals. A woman told me last week that if she did not believe in god she would do bad and illegal things. I responed with " I do not need a god in my life to be a good person."  Religious people think that since they believe in a god or jesus that they are automatically a good person. They end up doing horrible things and later they just tell a preist they are 'sorry' and they think they are going to go to a better place when they die. On the other hand, because I do not beleive in jesus, but am a person with great morals, they think that I should spend my afterlife in a firery pit of doom. Why is this so?  It seems like religion is just an excuse people use when there is something they can not explain.