What you are doing is actually a bit illegal. Just because you are not explicitly profiting doesn’t mean you are not commiting copyright infringement. The issue is that your friends end up with a full copy of the DVD and do not need to ever return it, whereas with lending there is still only the one copy in existence.
I’m a big advocate for filesharing in general, but you’re doing it a bad way. Simply put, you are taking all the risk for no benefit. Why are you even lending DVDs to your cousin if they’ve proven to be a klutz that breaks your stuff?
You are making yourself out to be the victim here, but you’re missing out on this obvious point: you are not obliged to lend your DVDs at all. You are enabling people destroying your property! You can’t do this and then cry that it was broken. Dude, you brought it on yourself.
What you are doing now is actually serious copyright infringement, and I would advise you to stop doing it if you don’t want to get charged with piracy. You are entitled to make a backup copy for yourself and NOT to lend out to others. By giving them out, you are committing actual piracy.
@ninjacolin – as I said, I’m a big fan of filesharing, and where I live (Canada) it’s actually a bit legal. I end up buying more media by torrenting movies and TV. But there is a huge difference between downloading a TV show and burning a full copy of a DVD.