diff --git a/insert.module b/insert.module
index 5b4a578..871562f 100644
--- a/insert.module
+++ b/insert.module
@@ -272,7 +272,20 @@ function insert_field_widget_info_alter(&$info) {
 }
 
 /**
- * Configuration form for editing insert settings for a field instance.
+ * Implements hook_variable_info().
+ */
+function insert_variable_info() {
+  $variable['insert_absolute_paths'] = array(
+    'title' => t('Insert absolute paths'),
+    'description' => t('Set this variable to FALSE if you want insert to use relative path when creating file URL for the public and private file stream wrappers.'),
+    'type' => 'boolean',
+    'default' => TRUE,
+  );
+
+  return $variable;
+}
+
+/** * Configuration form for editing insert settings for a field instance.
  */
 function insert_field_widget_settings_form($field, $instance) {
   $widget = $instance['widget'];
@@ -369,6 +382,8 @@ function theme_insert_field_widget_settings_styles($variables) {
  * setting.
  */
 function insert_create_url($uri) {
+  global $base_url;
+
   // This variable has no configuration location. It may be set by placing
   // $conf['insert_absolute_paths'] = FALSE;
   // in the site settings.php file, or by manually running variable_set().
@@ -376,8 +391,15 @@ function insert_create_url($uri) {
   // see http://drupal.org/node/640352.
   $absolute = variable_get('insert_absolute_paths', TRUE);
 
-  // TODO: Rewrite this function to support relative paths? Tricky because
-  // not all stream wrappers support local paths at all.
+  $scheme = file_uri_scheme($uri);
+  if (!$absolute && ($scheme == 'public' || $scheme == 'private')) {
+    $base = $base_url . '/';
+    $matches = array();
+    if (preg_match('/^[\w\d]+:\/\/.*?\//', $base, $matches)) {
+      $base = drupal_substr($matches[0], 0, -1);
+      return str_replace($base, '', file_create_url($uri));
+    }
+  }
   return file_create_url($uri);
 }