I agree that a knee length raincoat - like a classic London Fog - looks perfectly acceptable over a suit on many occasions, although I'd consider it less than ideal in some settings, particularly when the sun is shining from a clear, blue sky. Still quite possibly a better choice than a pea coat, though.
Ideally, one would have a raincoat, a pea coat, and a couple of other types of coats, and would choose the most appropriate one for a given situation. Since highly acceptable coats needn't be outrageously expensive and can go years and years without having to be replaced, it's really not such a ridiculous idea to go this route. But if, for whatever reason, only a pea coat is available, or only a raincoat is available, then one makes due. It's not a social gaffe which will ruin one's life, okay?
Frankly, the key to wearing a pea coat over your suit without having everyone stare and whisper unflattering things about your choice of clothes, is to simply to put it on and forget about it. When a man's worried about not being dressed properly, it shows. Contrawise, when a man isn't worried that he's improperly dressed, that self-assurance shows, too.
Naturally, it can be taken to silly extremes - wear a varsity jacket over your tuxedo, and you're going to look like a tool, no matter how confidently you carry yourself. But within those fairly broad limits, if you're not worried about a mismatch between your suit and your coat, chances are nobody else is going to make an issue of it.
Still, for about the cost of a decent suit, one can buy a conservative raincoat (with zip-out lining, for cold weather), a Sterlingwear peacoat, and a full (or 3/4) length merino wool overcoat. Presto, three outerwear niches filled, and likely to remain filled for a good number of years to come. It's like buying a few pairs of quality dress shoes, or an appropriate wristwatch. Make the purchase, then you needn't worry about it again anytime soon.
