An annual deductible or any deductible is just a portion of the Vet bill that you pay directly out of pocket along with the Pet Insurance when taking your dog or other pet to the Vet.
Pet Insurance doesn't cover the full amount of the Vets bills and will only cover around 90% of the Vet bill and then the deductible would be the rest of the 10% of the amount of the Vet bill you'd be responsible for.
The deductible is only paid when you actually use the Pet insurance to pay for a Vet Bill when you take your pet to the Vet.