State highway also covers several counties to the north (7)

I believe the answer is:

indiana

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'state' is the definition.
(US state)

I don't understand how the rest of the clue works.

(Other definitions for indiana that I've seen before include "Vice President Pence's state" , "State south of Lake Michigan" , "Gary's place" , "--- Jones, Harrison Ford film character" , "State of southern US" .)

I've seen this clue in The Times.

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