The world is full of theists who honestly haven't a clue about what an atheist truly is. Their own belief in god leads them to believe that atheists must also believe, but are dishonest.

If you feel that they try to insult you, just laugh. It won't help though. I think it's better is to ask questions, to let them explain, what a soul is, why they don't deny their god, etc. I'm not sure if I could in the circumstances you describe.

One of my friends told me that she believed in pet psychics. I laughed loudly right in her face - not because I'm an asshole, but because it didn't even occur to me in the moment that she WASN'T joking. If your natural reaction was to laugh, then you don't need to feel bad. If you purposely ridiculed her, that's another story. However, I do have to say that what she said was pretty smug and offensive to you, so I support you either way

No you were not wrong laughing at her face. Everybody has the right to express their opinion but they don’t have the right to control our reactions to what they say. Actually, she was pretty rude to you, and yes, they don’t think at all, period. Personal responsibility says you can say anything you want or do anything you want as long as you are willing to take the consequences of what you said or did. If she regularly says things like these outside her religious clique, you most likely are not the first one to laugh at her face.